East of Suez Market Update 22 Sep

Prices in East of Suez ports have fallen across the board today, while VLSFO availability in Singapore remains tight, with cargo delays linked to the Middle East conflict adding to the pressure.

IMAGE: Logistics and transportation of container and cargo ships with a crane in Singapore. Getty Images

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

• VLSFO prices down in Zhoushan ($39/mt), Fujairah ($30/mt) and Singapore ($24/mt)
• LSMGO prices down in Singapore ($80/mt), Zhoushan ($47/mt) and Fujairah ($44/mt)
• HSFO prices down in Singapore ($26/mt), Fujairah ($22/mt) and Zhoushan ($16/mt)
• B30-VLSFO prices down in Singapore ($26/mt)

Singapore's VLSFO price has fallen by $24/mt, the smallest decline among the three major Asian bunker ports. The price now stands at a $126/mt discount to Fujairah and a $40/mt discount to Zhoushan.

VLSFO supply in Singapore remains tight. Recommended lead times for VLSFO stand at 13-17 days, barely changed from 13-16 days a week earlier, with most suppliers holding low stock levels. Delays in cargo arrivals linked to the ongoing conflict in the Middle East have added further pressure on availability, a Singapore-based source said.

HSFO availability has improved slightly, with advised lead times easing to 9-12 days from 10-19 days last week, while LSMGO supply has strengthened, with lead times narrowing to 5-7 days from 6-8 days previously.

At Malaysia's Port Klang, bunker supply remains constrained. Prompt VLSFO availability is particularly tight, LSMGO supply remains limited and HSFO availability continues to face pressure.

Brent

The front-month ICE Brent contract has declined by $2.57/bbl on the day, to trade at $99.33/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure as persistent Middle East tensions continue to support risk premiums.

The US has intensified pressure on Iran, warning that it will shut down Iranian airlines starting tomorrow.

Last week, Washington passed a new bill that extends the Iran Sanctions Act of 1996 through 2031, allowing the US President to impose sanctions on entities doing business with Iran's energy sector.

Downward pressure:

Brent crude’s price has shed last week’s gains, as the market shifted its focus to the United Nations General Assembly summit scheduled to take place in New York this week.

Iranian President Masoud Pezeshkian will be present at the high-stakes summit.

Market participants are hoping for a diplomatic breakthrough at the summit, banking on peace talks to pave the way for a quick resolution of the Middle East conflict – ultimately reopening the Strait of Hormuz to commercial navigation.

US President Donald Trump said that he is open to meeting his Iranian counterpart on the sidelines of the summit, according to media reports. 

Brent crude’s price moved lower “as markets weighed hopes for constructive discussions at this week's UN General Assembly,” two analysts from ING Bank reported.

By Tuhin Roy and Aparupa Mazumder

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