East of Suez Market Update 9 Jan

Prices in East of Suez ports have moved up, and prompt availability of all grades is tight in Fujairah.

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 Zhoushan (21/mt), Singapore ($17/mt) and Fujairah ($11/mt)
• LSMGO prices up in Fujairah ($33/mt), Zhoushan ($25/mt) and Singapore ($4/mt)
• HSFO prices up in Fujairah ($12/mt), Zhoushan ($11/mt) and Singapore ($4/mt)
• B30-VLSFO prices up in Fujairah ($31/mt) and Singapore ($29/mt)

Fujairah’s LSMGO price recorded the steepest increase among the three ports over the past session. As a result, Fujairah’s LSMGO price continues at significant premiums of $148/mt over Singapore, and $91/mt over Zhoushan.

Prompt bunker supply in Fujairah remains tight across all grades, with several suppliers facing compressed delivery schedules. Most are quoting lead times of 5–7 days, though a few are still able to accommodate urgent stems at a premium, according to a source. Similar supply conditions are being reported in Khor Fakkan.

In Australia, the risk of a tropical cyclone developing near the northeast Queensland coast tomorrow is high. Warning areas currently extend along coastal stretches between Tully and Airlie Beach, including Townsville and Bowen, a source said.

Severe weather and flood warnings are also in place. The system is forecast to strengthen as it approaches the coast, with a high likelihood of developing into a tropical cyclone on Saturday.

The Port of Townsville suspended commercial shipping from yesterday and is preparing for a cyclone expected to cross the coast, north of Townsville over the weekend. Meanwhile, the Harbour Master has closed the Port of Abbot Point to commercial shipping until further notice, according to GAC Hot Port News.

Brent

The front-month ICE Brent contract has gained by $2.38/bbl on the day, to trade at $62.48/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has moved higher after the US Coast Guard seized two tankers, allegedly carrying sanctioned Venezuelan oil.

The first tanker, MV Bella 1, was seized in the northern Atlantic Ocean, while the second vessel, MT Sophia, was captured in the Caribbean Sea.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” two analysts from ING Bank said.

The move comes days after Washington detained Venezuelan President Nicolas Maduro from the country’s capital Caracas.

“This action adds some supply risk to the market in the short term,” ING Bank’s analysts added.

Downward pressure:

Brent’s price gains were partially capped by uncertainty surrounding Venezuela’s oil assets, according to market analysts.

Earlier this week, US President Donald Trump said Venezuela’s interim administration will be “turning over” between 30 million to 50 million bbls of sanctioned oil, to be sold at the market price.

The end of Maduro's presidency in Venezuela could add fresh barrels to an already oversupplied market, analysts said.

“A smooth transition means the potential for stronger Venezuelan supply,” ING Bank’s analysts added.

By Tuhin Roy and Aparupa Mazumder

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