East of Suez Market Update 5 Mar

Prices across most East of Suez bunker hubs have surged, while several suppliers in Fujairah have declared force majeure.

IMAGE: Harbour craft in front of an oil tanker in Fujairah. Port of Fujairah

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

• VLSFO prices up in Fujairah ($61/mt), Zhoushan ($31/mt) and Singapore ($22/mt)
• LSMGO prices up in Zhoushan ($137/mt), Fujairah ($130/mt) and Singapore ($99/mt)
• HSFO prices up in Fujairah ($75/mt), Zhoushan ($65/mt) and Singapore ($25/mt)
• B30-VLSFO prices down in Fujairah ($3/mt) and Singapore ($2/mt)

LSMGO prices across the three major Asian bunker hubs have climbed for a fourth straight day, with prices in all three ports now exceeding $1000/mt and approaching levels last seen during January–March 2023.

During January–March 2023, firm crude prices underpinned LSMGO values, while tight middle distillate supply—linked to disrupted diesel trade flows following the Russia–Ukraine war—kept marine gasoil markets constrained. At the same time, robust bunkering demand at key Asian hubs and refiners prioritising higher-margin products limited LSMGO availability.

The current rally is being fuelled by escalating geopolitical tensions in the Middle East, supply disruptions in Fujairah, and broader strength in global distillate markets, including diesel and jet fuel.

Meanwhile, firm bunker demand in Singapore—potentially as buyers secure fuel for longer voyages, or in anticipation of further price increases—has also supported the grade’s upward momentum.

“With vessels being rerouted due to the closure of the Strait of Hormuz, we expect increasing port congestion at hubs near the Persian Gulf and across Southeast Asia,” logistics platform Flexport said.

Several bunker suppliers in Fujairah have suspended deliveries amid security concerns following Iranian strikes across the UAE. Most suppliers have paused operations due to uncertainty surrounding loadings, as some terminals remain closed. According to a source, some suppliers are still waiting to load cargoes, while others have temporarily stopped offering until there is greater clarity on when the Strait of Hormuz will reopen, as many vessels remain stranded following the closure.

Brent

The front-month ICE Brent contract has lost by $0.35/bbl on the day, to trade at $83.51/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has held steady on the back of a full-blown conflict between US-Israel and Iran.

Iran’s Islamic Revolutionary Guard Corps (IRGC) has completely sealed the Strait of Hormuz, according to media reports.

The news comes as continued airstrikes in the region have significantly escalated maritime security threats.

“Concerns are centred on the flow of supply through the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

About 20% of global oil supply transits the vital waterway, according to analysts.

“With producers unable to export their oil they are having to stockpile stranded supplies in storage tanks,” Hynes added.

Downward pressure:

Brent’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a rise in US crude stocks.

Commercial US crude oil inventories have increased by 3.5 million bbls to 439 million bbls for the week ending 27 February, according to data from the EIA.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

By Tuhin Roy and Aparupa Mazumder

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