East of Suez Market Update 4 Aug

Prices in East of Suez ports have moved higher, and availability across all grades is tight in Singapore.

IMAGE: Cargo terminal at the Port of Singapore. Getty Images

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

• VLSFO prices up in Singapore ($45/mt), Fujairah ($33/mt) and Zhoushan ($1/mt)
• LSMGO prices up in Fujairah ($37/mt), Singapore ($35/mt) and Zhoushan ($6/mt)
• HSFO prices up in Singapore ($24/mt), Zhoushan ($21/mt) and Fujairah ($18/mt)

Singapore’s VLSFO price has surged by $45/mt in the past day, marking the steepest increase among the three major Asian bunker hubs. The port’s VLSFO price now stands at premiums of $54/mt over Zhoushan and $53/mt over Fujairah.

VLSFO availability in Singapore remains tight, with suppliers recommending lead times of 12-24 days, compared with 16-20 days last week. Supply continues to be under pressure as the port’s fuel oil inventories have yet to recover to pre-conflict levels, while cargo inflows remain affected by renewed US-Iran hostilities that have disrupted traffic through the Strait of Hormuz.

Enterprise Singapore data shows that fuel oil inventories declined from more than 23 million bbls in March to below 18 million bbls in June. Although stocks edged higher in July, they remained below 19 million bbls.

HSFO supply remains tight, with recommended lead times widening to 10-24 days from 12-15 days a week earlier. Meanwhile, LSMGO requires lead times of 2-11 days, compared with 5-8 days last week.

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

Brent

The front-month ICE Brent contract has gained by $2.09/bbl on the day, to trade at $86.07/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Oil has reversed yesterday’s losses, as market participants grow sceptical of US President Donald Trump's peace rhetoric, and the likelihood of reaching an agreement anytime soon.

“We’ve been in this situation multiple times before, only to see things unravel,” two analysts from ING Bank noted.

The US Central Command (CENTCOM) is “looking for new creative and unconventional ways to pressure and punish Iran” as it continues to enforce the US blockade against Iran, CNN reported, citing an unnamed CENTCOM officer.

As of yesterday, CENTCOM has redirected 44 commercial vessels, disabled two, and boarded two, to prevent them from entering or departing Iranian ports, it said on social media platform X.

“With Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation,” ING Bank’s analysts said.

Downward pressure:

While there are no major downward pressures acting on Brent today, market analysts will continue to keep a close eye on any signs of de-escalation in the Middle East and evolving developments in US-Iran diplomacy.

Brent’s price gains were capped “after the US and Iran signalled that discussions about restoring shipping through the Strait of Hormuz had resumed,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Tuhin Roy and Aparupa Mazumder

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