East of Suez Market Update 24 Aug

Bunker benchmarks in East of Suez ports have moved in mixed directions, while availability of all grades is tight in Zhoushan.

IMAGE: Night scene of Zhoushan, close to the dock on Putuo island. Getty Images

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

• VLSFO prices up in Zhoushan ($7/mt), and down in Fujairah ($12/mt) and Singapore ($8/mt)
• LSMGO prices up in Fujairah ($12/mt), and down in Singapore ($19/mt) and Zhoushan ($6/mt)
• HSFO prices up in Fujairah ($4/mt), and down in Singapore ($5/mt) and Zhoushan ($1/mt)

Zhoushan’s VLSFO price has risen by $7/mt over the weekend, while prices in Fujairah and Singapore have declined. As a result, Zhoushan’s VLSFO price has moved from near parity with Singapore to a premium of $14/mt. Its premium over Fujairah has more than doubled to $34/mt.

VLSFO availability in Zhoushan remains constrained despite muted bunker demand. Suppliers are recommending lead times of around 10 days, compared with 7-10 days a week ago. LSMGO and HSFO lead times are also around 10 days, up from 7-10 days previously.

The tight supply is largely a lingering effect of the two-week suspension of bunkering operations in Zhoushan due to Typhoon Dolphin, which has resulted in severe backlogs. The situation could persist as bunkering operations at Zhoushan’s outer anchorages, Tiaozhoumen and Xiazhimen, have been suspended again since the weekend due to rough weather caused by three successive cyclones, a source said.

The source added that there is currently no clear timeline for the resumption of operations at the affected anchorages.

In Taiwan, VLSFO and LSMGO can be supplied in around three days at Hualien and Keelung, slightly longer than around two days last week. In Kaohsiung, 3-4 days are recommended, up from around two days, while Kaohsiung’s lead times remain steady at 3-4 days.

Taiwan is also bracing for Typhoon Saudel, which is expected to hit the northern part of the island later this week. The typhoon is currently moving towards the Okinawa region in southern Japan. On Friday, it is expected to pass by northern Taiwan before reaching the eastern coast of China, according to Taiwan's Central Weather Administration.

At Kaohsiung and Hualien, local governments have announced a one-day off on 24 August. However, state-owned bunker supplier CPC Corporation’s (CPC) barge or truck may operate if weather conditions stabilise. Operations will be subject to the discretion of the barge captain or site manager; in Hualien, this applies to CPC’s truck operations, a Taiwan-based source said.

Brent

The front-month ICE Brent contract has inched $0.13/bbl lower on the day from Friday, to trade at $92.78/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has opened this week trading above $90/bbl, as market participants anticipate US' economic sanctions against Iran.

The US treasury secretary Scott Bessent will hold a press conference at 18.00 GMT today, to announce economic measures against Iran.

His comments follow shortly after US President Donald Trump vowed sweeping sanctions on Iran and its allies.

Bessent has called the move an “economic D-Day” for Tehran, putting upward pressure on Brent crude’s price.

Brent crude’s price has found support “as expectations of a near-term resolution to the Middle East conflict faded,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

While there is no new downward pressure acting on Brent, market participants will keep an eye out for US crude stocks data, scheduled to come out later this week.

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 US Energy Information Administration (EIA).

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

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