East of Suez Market Update 29 May

Prices in East of Suez ports have moved in mixed directions, and LSMGO availability is good across several Omani ports.

IMAGE: Bunker barge at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices up in Fujairah ($10/mt), and down in Zhoushan ($22/mt) and Singapore ($8/mt)
• LSMGO prices down in Singapore ($40/mt), Zhoushan ($8/mt) and Fujairah ($7/mt)
• HSFO prices down in Zhoushan ($17/mt), Singapore ($9/mt) and Fujairah ($2/mt)

Singapore and Zhoushan’s VLSFO prices have declined over the past day, while Fujairah’s price has increased. Singapore’s VLSFO price is currently at a substantial discount of $168/mt to Fujairah and is trading near parity with Zhoushan.

Singapore’s LSMGO price has fallen by $40/mt over the past day, marking the steepest decline among the three major Asian bunker ports. A lower-priced 50-150 mt LSMGO stem fixed in the port has weighed on the benchmark.

Bunker fuel availability in Singapore remains tight, with only a limited number of suppliers offering small HSFO parcels and premiums expected for quantities of 500 mt and below.

VLSFO availability in Singapore has tightened further, with recommended lead times increasing to 13-18 days from 10-14 days last week. Lead times for LSMGO have increased to 10-12 days from 5-10 days previously, while HSFO lead times now stand at 9-11 days, up from 5-10 days last week.

Meanwhile, “LSMGO supply remains workable across major ports, with prompt availability still tight in some areas. Recommended lead time is around 3–5 days depending on port and quantity,” a Middle East-based source said.

Prompt LSMGO availability continues to be strong across Omani ports, including Sohar, Salalah, Muscat and Duqm, with one supplier recommending lead times of around 1-2 days.

Brent

The front-month ICE Brent contract has fallen by $2.90/bbl on the day, to trade at $93.51/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Concerns over whether the ceasefire between the US and Iran will hold, following fresh US military strikes, have limited Brent’s decline.

“Crude oil prices rallied early in the session amid renewed skirmishes in the Middle East,” said ANZ Bank senior commodity strategist Daniel Hynes.

A closure of the Strait of Hormuz and escalating geopolitical tensions in the Middle East could push Brent prices as high as $200/bbl by the end of 2026, analysts at energy firm Wood Mackenzie estimate.

“Oil prices could reach US$200/bbl [by end of 2026] in a worst-case scenario, as more than 11 million b/d of Gulf crude and condensate supply remains curtailed,” the Wood Mackenzie report said.

Meanwhile, commercial US crude oil inventories fell by 3.3 million bbls to 441.7 million bbls in the week ending 22 May, according to the US Energy Information Administration’s (EIA) weekly oil inventory report, adding some upward pressure to prices.

Downward pressure:

Reports that the US and Iran have reached an agreement on a potential ceasefire extension have added downward pressure on oil prices.

The US and Iran agreed on Thursday to extend the ceasefire and lift restrictions on shipping through the Strait of Hormuz, according to Reuters citing sources.

“Washington nearing deal to extend Iran ceasefire, reopen Hormuz,” remarked VANDA Insights founder Vandana Hari.

“The oil market continues to edge lower amid growing optimism that the US and Iran are moving toward a deal,” two analysts from ING Bank said.

By Tuhin Roy

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