East of Suez Market Update 3 Aug

Prices in East of Suez ports have moved in mixed directions, and availability is tight across all grades in Zhoushan.

IMAGE: Illuminated Kaohsiung city and harbor at night, Taiwan. Getty Images

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

• VLSFO prices up in Zhoushan ($25/mt) and Singapore ($17/mt), and down in Fujairah ($11/mt)
• LSMGO prices up in Zhoushan ($62/mt), and down in Fujairah ($61/mt) and Singapore ($13/mt)
• HSFO prices down in Singapore ($17/mt), Fujairah ($16/mt) and Zhoushan ($10/mt)

Zhoushan’s VLSFO price has climbed by $25/mt over the weekend, outpacing gains in Singapore, while Fujairah’s price has declined. As a result, Zhoushan’s VLSFO is now at a $31/mt premium to Fujairah but remains at a $9/mt discount to Singapore.

VLSFO availability in Zhoushan remains tight despite subdued demand. Suppliers are now recommending lead times of around 12 days, up from about nine days previously. Recommended lead times for both LSMGO and HSFO have also increased from around seven days to about 10 days.

However, bunker operations across Zhoushan’s anchorages could be suspended from tomorrow due to adverse weather caused by Typhoon Dolphin, according to a source.

The typhoon was located about 2,720 kilometres east of Taipei this morning and was moving westward, according to Taiwan’s Central Weather Administration (CWA).

In Taiwan, VLSFO and LSMGO can be delivered within about two days in Hualien and Taichung, while Kaohsiung requires lead times of around 3–4 days. In Keelung, lead times for both grades have eased from 4–5 days to around two days.

Last week, lead times in Keelung had increased due to barge constraints after one bunker barge suffered a serious technical fault while another was already in dry dock. A bunker barge from Taichung has since been deployed temporarily to support operations in Keelung, reducing lead times. The damaged barge is expected to resume operations on Friday, a Taiwan-based trader said.

The source also noted that Typhoon Dolphin could disrupt bunkering operations at Taiwanese ports from Thursday.

Brent

The front-month ICE Brent contract has declined by $4.30/bbl on the day from Friday, to trade at $83.98/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure, as the prospect of worsening supply disruptions in the Middle East continues to hang over the market.

On Friday, Tehran launched attacks on US military assets, including the Ahmad al-Jaber Air Base in Kuwait and facilities at Bahrain’s Sheikh Isa Air Base.

The Middle East conflict has “spread well beyond Iran and the United States,” according to SPI Asset Management managing partner Stephen Innes.

The latest attacks come shortly after Saudi Arabian energy infrastructure came under attack, prompting Washington and Riyadh to launch a joint military operation against Iran-aligned militias.

“Saudi energy infrastructure has been attacked. Iraqi militias, the Houthis and other Iranian-aligned groups have widened the battlefield across the Gulf and Red Sea,” Innes remarked.

Downward pressure:

Oil prices have opened the week on a lower footing, after US President Donald Trump called off a planned round of military strikes on Iran, fuelling hopes of a diplomatic breakthrough.

“The perimeters of a deal have been agreed to,” Trump said on Truth Social, putting some downward pressure on Brent.

“The immediate threat of escalation has eased, but Iran has yet to confirm that a workable diplomatic understanding exists,” Innes said.

Additionally, Iran’s foreign minister Abbas Araghchi said that negotiations with Oman regarding a new shipping arrangement via the Strait of Hormuz are in its final stages.

“Until tankers begin moving safely through Hormuz again, claims of diplomatic progress should be treated cautiously,” Innes added.

By Tuhin Roy and Aparupa Mazumder

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