East of Suez Market Update 3 July

Most prices in East of Suez ports have moved up, and availability of all grades is good in Hong Kong.

IMAGE: A view of Hong Kong skyline and Victoria Harbor. Getty Images

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

• VLSFO prices up in Zhoushan ($12/mt) Singapore ($3/mt), and down in Fujairah ($5/mt)
• LSMGO prices up in Zhoushan ($38/mt), Singapore ($22/mt) and Fujairah ($16/mt)
• HSFO prices up in Fujairah ($8/mt), Singapore ($6/mt) and Zhoushan ($5/mt)
• B30-VLSFO price up in Singapore ($12/mt)

Zhoushan's VLSFO price has increased by $12/mt over the past day, marking the largest gain among the three major Asian bunker hubs. The increase has widened Zhoushan's VLSFO premium over Singapore by $9/mt to $22/mt, although the port's benchmark still trades at a substantial $88/mt discount to Fujairah.

Despite muted bunker demand, VLSFO supply remains tight in Zhoushan. Recommended lead times have lengthened to 7–12 days from 7–10 days last week, supporting the recent price increase. Lead times for both LSMGO and HSFO have also extended to 5–7 days, compared with three days previously.

Hong Kong's bunker market, meanwhile, remains steady, with recommended lead times for all major fuel grades holding at around seven days, largely unchanged in recent weeks.

In Sri Lanka, market conditions are also stable, with adequate stocks of all major bunker fuel grades available in Colombo and Hambantota. At least one supplier is recommending lead times of around six days.

Brent

The front-month ICE Brent contract has gained by $1.33/bbl on the day, to trade at $72.10/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has traded higher once again, after Iran’s joint military command threatened ‘forceful response’ against commercial vessels in the Strait of Hormuz that fail to comply with its approved shipping routes.

The development comes after the US Central Command (CENTCOM) issued a statement pledging safe passage through the region, aligning its mission with its allies in the Middle East.

US CENTCOM commander Brad Cooper met with military officials from Bahrain, Kuwait, Saudi Arabia, and eight more Middle Eastern countries on Wednesday, to discuss vessel transit through the Strait of Hormuz.

The meeting has triggered the stark response from Iran, according to market analysts.

Downward pressure:

The resumption in commercial vessel transit through the Strait of Hormuz has largely capped Brent’s price gains today.

About 14 million bbls of crude oil has successfully passed through the critical waterway on Wednesday, ANZ Bank’s senior commodity strategist Daniel Hynes said, citing Bloomberg ship tracking data.

Meanwhile, a total of 43 commercial vessels crossed the Strait on the same day, according to maritime intelligence firm Windward.

Oil is under pressure “as crude flows through the Strait of Hormuz continue to improve,” Hynes said.

By Tuhin Roy and Aparupa Mazumder

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