East of Suez Market Update 8 May

Bunker fuel prices in East of Suez ports have largely tracked Brent’s upward movement, and availability across all grades remains 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 Fujairah ($11/mt), Singapore ($4/mt), and down in Zhoushan ($1/mt)
• LSMGO prices up in Zhoushan ($96/mt), Fujairah ($34/mt), and down in Singapore ($2/mt)
• HSFO prices up in Fujairah ($18/mt), Zhoushan ($17/mt) and Singapore ($1/mt)
• B30-VLSFO price up in Singapore ($24/mt)

Singapore’s LSMGO price has decreased some in the past day, partly due to a lower-priced 50-150 mtstem fixed at the port. Singapore's LSMGO is currently trading at discounts of $365/mt and $107/mt to Fujairah and Zhoushan, respectively.

Bunker fuel availability across all grades is extremely tight in Singapore. VLSFO lead times now range between 9-18 days. HSFO lead times are around 4-10 days, while LSMGO requires 5-9 days.

Only a limited number of suppliers are offering small HSFO parcels in Singapore, and a premium is expected for quantities of 500 mt or less, a trader said.

At Malaysia’s Port Klang, VLSFO supply remains relatively stable, especially for smaller prompt volumes. However, availability of LSMGO and HSFO is tight, making both grades increasingly difficult to secure.

Bunker fuel availability in Hong Kong has tightened this week, with lead times for all grades holding at around seven days.

Brent

The front-month ICE Brent contract has gained by $1.12/bbl on the day, to trade at $100.30/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent futures are poised to end the week above the $100/bbl mark amid growing tensions between the US and Iran.

Iran's military has accused Washington of violating the ceasefire agreement by targeting two Iran-linked vessels in the Strait, as well as civilian areas yesterday.

“Oil prices are likely to remain highly headline‑driven, with the recent escalation reinforcing the risk premium,” two analysts from ING Bank noted.

Meanwhile, the US Central Command (CENTCOM) said it intercepted Iranian missiles and responded with “self-defense” strikes as the US Navy’s guided-missile destroyers transited the Strait of Hormuz.

“With flows through the Strait of Hormuz unlikely to normalise quickly, markets remain exposed to further upside on any setbacks in diplomatic efforts,” ING Bank’s analysts said.

Downward pressure:

Brent’s price gains were capped by hopes of a ceasefire deal between Washington and Tehran that could eventually reopen the strategically crucial Strait of Hormuz to commercial vessel traffic.

Iran is considering a new one-page US proposal to end the conflict in the Middle East, the BBC reported earlier, prompting a steep sell-off in Brent’s price earlier this week.

“While tensions have escalated [today], the US has signalled no immediate intent to intensify the conflict and is reportedly still awaiting Iran’s response to a proposal to reopen the trade route,” ING Bank’s analysts noted.

By Aparupa Mazumder

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