East of Suez Market Update 21 Aug

Most prices in East of Suez ports have declined, and LSMGO availability is good across several Omani ports.

IMAGE: An aerial view of Sohar Port and Freezone. Sohar Port and Freezone

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

• VLSFO prices unchanged in Fujairah, and down in Zhoushan ($32/mt) and Singapore ($21/mt)
• LSMGO prices down in Fujairah ($59/mt), Zhoushan ($54/mt) and Singapore ($20/mt)
• HSFO prices down in Zhoushan ($19/mt), Singapore ($12/mt) and Fujairah ($8/mt)
• B30-VLSFO price up in Singapore ($8/mt)

Fujairah’s VLSFO price has held steady over the past day, while prices in Zhoushan and Singapore have declined. Fujairah’s VLSFO is currently priced at discounts of $16/mt and $15/mt to Singapore and Zhoushan, respectively.

Fujairah’s LSMGO price has fallen by $59/mt, the steepest decline among the three major Asian bunkering hubs. Despite the drop, Fujairah’s LSMGO remains at premiums of $167/mt over Singapore and $127/mt over Zhoushan.

Renewed hostilities between the US and Iran around the Strait of Hormuz continue to weigh on bunker fuel supply in Fujairah. VLSFO and LSMGO availability remains tight and broadly unchanged from last week, with only a limited number of suppliers able to offer LSMGO.

In Oman, however, LSMGO availability remains stable across key ports, including Salalah, Muscat, Duqm and Sohar. Suppliers are recommending lead times of 2-3 days, depending on the port and stem size.

Brent

The front-month ICE Brent contract has moved $0.76/bbl lower on the day, to trade at $92.91/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price is poised to end the week higher than it began, amid continued growing hostilities in the Middle East, between the US and Iran.

Washington has vowed to drag the war, with President Donald Trump announcing sweeping economic sanctions on Iran and its allies.

Countries providing any type of financial support to Iran will “face TREMENDOUS Economic Consequences”, Trump said in a post on social media platform Truth Social.

Meanwhile, commercial vessels transiting the region have continued to come under drone assaults.

A merchant ship travelling west in the Gulf of Aden, about 36 nautical miles east of Al Mukalla, Yemen, was hijacked yesterday, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The tanker has been boarded by six armed persons who are now in control of the vessel and redirecting to Somalia,” the UKMTO said.

Downward pressure:

While there is no new downward pressure acting on Brent, its price rally was capped after the US Energy Information Administration (EIA) reported a surprise rise in US crude stocks yesterday.

Commercial US crude oil inventories increased by 4.4 million bbls to 429 million bbls in the week ending 14 August, according to data from the EIA.

“This [EIA’s report] contrasted sharply with API's reported 328k barrel [328,000 bbls] draw and market expectations for a 74k barrel decline,” two analysts from ING Bank noted.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online