East of Suez Market Update 21 Apr

Prices in East of Suez ports have moved in mixed directions, and LSMGO and HSFO availability is tight in Malaysia’s Port Klang.

IMAGE: Aerial view of Singapore container terminal. Getty Images

Changes on the day to 17.00 SGT (09.00 GMT) today:

• VLSFO prices down in Zhoushan ($15/mt), Singapore ($13/mt) and Fujairah ($2/mt)
• LSMGO prices up in Zhoushan ($53/mt), Fujairah ($20/mt), and down in Singapore ($54/mt)
• HSFO prices down in Zhoushan ($29/mt), Singapore ($18/mt) and Fujairah ($12/mt)
• B30-VLSFO prices down in Singapore ($9/mt)

VLSFO benchmarks across the three major Asian bunker ports have declined for a second consecutive day. Singapore's VLSFO is currently priced at discounts of $39/mt to Zhoushan and $18/mt to Fujairah.

Prices in Singapore have dropped amid expectations that peace talks between the US and Iran this week could ease regional tensions and lead to increased supply from the Middle East, a source said.

Weak demand has also weighed on the market. “Demand for VLSFO is slow,” a Singapore-based trader said, adding further downward pressure on the benchmark.

Meanwhile, VLSFO lead times in Singapore remain largely steady at 5–12 days. HSFO lead times now stand at 5–10 days, compared with 3–12 days last week.

For LSMGO, recommended lead times are stable at 2–7 days, broadly unchanged from the previous week.

At Port Klang, VLSFO availability remains relatively stable, particularly for smaller prompt stems. However, LSMGO supply has tightened, while HSFO availability remains constrained, making both grades increasingly difficult to secure.

Brent

The front-month ICE Brent contract has inched $0.13/bbl lower on the day, to trade at $95.07/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has continued to trade above $95/bbl on the back of persistent tensions in the Middle East.

The US-Israel conflict with Iran is creating the ​“worst energy crisis ever faced by the ‌world,” according to Fatih Birol, the executive director of the International Energy Agency (IEA).

"This is indeed the biggest crisis ​in history," Reuters quoted Birol as saying in a radio interview.

Yemen-based Houthi militants have threatened to close the Bab al-Mandab Strait on the Red Sea, if hostilities between the US and Iran continue.

The Bab al-Mandab Strait is another key route to ship Middle Eastern oil to global markets. Blocking the region will cut off alternative options for Saudi Arabia’s oil shipments, according to market analysts.

“The oil market right now feels like a stage where the props are on fire, the script says panic,” remarked SPI Asset Management managing partner Stephen Innes.

Downward pressure:

Hopes of a de-escalation in the Middle East has capped Brent’s price gains today, with markets still factoring in the possibility of further negotiations.

A fresh round of talks between the Washington and Tehran is planned for Wednesday in Islamabad, the BBC reported.

“The US is sending negotiators to Pakistan for peace talks today. Iran, however, has said it doesn’t plan to take part in talks,” two analysts from ING Bank said.

By Tuhin Roy and Aparupa Mazumder

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