East of Suez Market Update 7 Sep

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

IMAGE: Aerial view of Zhoushan City, Zhejiang Province. Getty Images

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

• VLSFO prices up in Singapore ($14/mt), Zhoushan ($4/mt) and Fujairah ($1/mt)
• LSMGO prices up in Zhoushan ($19/mt), Singapore ($10/mt), and down in Fujairah ($13/mt)
• HSFO prices up in Zhoushan ($11/mt), and down in Singapore ($3/mt) and Fujairah ($1/mt)
• B30-VLSFO price up in Singapore ($9/mt)

VLSFO prices across the three major Asian bunker ports have increased by $1-14/mt over the weekend. Zhoushan’s LSMGO price has recorded a sharper rise of $19/mt over the same period, marking the steepest increase among the three ports. Following the price movement, Zhoushan’s LSMGO is at a $45/mt premium to Singapore, while remaining at a substantial $171/mt discount to Fujairah.

Despite subdued bunker demand, fuel availability remains tight in Zhoushan. Suppliers are quoting VLSFO lead times of around ten days, almost unchanged from a week earlier. LSMGO and HSFO supply is also constrained, with lead times holding at around ten days.

The persistent supply tightness is largely linked to a two-week suspension of bunkering operations following Typhoon Dolphin in early August, which left suppliers with significant delivery backlogs. Availability came under further pressure toward the end of August, when rough weather associated with four consecutive tropical systems forced another suspension of bunkering at Zhoushan’s inner and outer anchorages, a source said.

Bunkering resumed on 31 August at the more sheltered Xiushandong and inner Mazhi anchorages, following a six-day weather-related suspension. Operations at Xiushandong were suspended again on 3 September after Typhoon Saudel made its third landfall in China along the Fujian coast. Bunkering has since resumed at the anchorage this morning.

Suppliers remain uncertain about when bunkering activity across Zhoushan will return to full capacity, with operations largely dependent on weather conditions, the source added.

Taiwan’s bunker market remains comparatively well supplied. VLSFO and LSMGO can be delivered in about two days at Hualien, Taichung and Keelung, while lead times at Kaohsiung are around three days. Availability at all four ports is broadly unchanged from last week.

Brent

The front-month ICE Brent contract has gained by $1.44/bbl on the day from Friday, to trade at $96.56/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has moved higher following major escalation in the Middle East region.

The US Navy struck three Iran-linked crude oil tankers over the weekend, the US Central Command (CENTCOM) said on social media platform X.

“The oil market remains well-supported with little sign of peace between the US and Iran,” two analysts from ING Bank noted.

The action came shortly after Iranian forces launched ballistic missiles toward two US warships patrolling regional waters, CENTCOM said.

Meanwhile, Tehran has threatened a new “restricted zone” outside the Strait of Hormuz, Al Jazeera reported.

If imposed, the move “could put additional vessels in the Gulf of Oman at risk,” ING Bank’s analysts added.

Downward pressure:

Brent crude’s price has faced little downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by two over the week to 449 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Tuhin Roy and Aparupa Mazumder

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