Europe & Africa Market Update 13 July

Regional bunker price benchmarks have surged, and VLSFO availability is tighter than LSMGO in Istanbul.

IMAGE: Aerial view of a cargo ship in transit in Istanbul, Türkiye. Getty Images

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($36/mt), Durban ($34/mt) and Gibraltar ($19/mt)
• LSMGO prices up in Durban ($69/mt), Rotterdam ($50/mt) and Gibraltar ($34/mt)
• HSFO prices up in Durban ($26/mt), Rotterdam ($17/mt) and Gibraltar ($15/mt)
• B30-VLSFO prices up in Gibraltar ($32/mt) and Rotterdam ($29/mt)

Regional bunker benchmarks have moved sharply higher, due to the gain in Brent.

Istanbul’s LSMGO price has increased $63/mt, more sharply than the increase in Rotterdam’s and Gibraltar’s LSMGO price. A higher priced 50-150 mt LSMGO stem, fixed in the Turkish port at $1,170/mt may have provided additional support to the benchmark.

Consequently, Istanbul’s price premium over Gibraltar has more than doubled by $29/mt, to $56/mt.

LSMGO bunker availability is stable in Istanbul, while availability of fuel oil grades like VLSFO and ULSFO is comparatively tighter for prompt supplies, a local supplier told ENGINE.

On the other hand, availability is tight for all fuel grades in the Gibraltar Strait ports, with buyers advised booking around seven days in advance to get good coverage from suppliers, a trader said.

Congestion persists in Gibraltar, with around 19 vessels currently awaiting bunkers due to lack of space, port agent MH Bland said. Some suppliers are delayed by around 12-48 hours on deliveries, the port agent added.

Brent

The front-month ICE Brent contract has gained by $1.70/bbl on the day from Friday, to trade at $77.90/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has climbed amid renewed hostilities in the Middle East – effectively shattering the temporary 60-day peace accord.

Another container vessel came under an Iranian missile attack off Oman’s coast yesterday, the United Kingdom Maritime Trade Operations (UKMTO) reported.

The US Central Command (CENTCOM) responded to the attack with strikes against 140 Iranian military targets, including missile and drone sites, naval capabilities, ammunition storage facilities and more.

The repeated attacks on commercial vessels have shattered the region’s fragile stability, with the recent escalation effectively throwing cold water on the now-defunct peace talks.

“There was no visible traffic in the strait on Sunday,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “The maritime security threat remains severe,” he added.

Downward pressure:

While Brent’s price faces no immediate downward pressure today, market participants remain wary of weakening global crude oil demand.

The Paris-based International Energy Agency (IEA) expects global oil demand to decline by 1 million b/d in 2026 – stopping short of providing an average global oil demand forecast.

The IEA expects oil demand to decline this year, as the ripple effects of the Middle East geopolitical unrest continue to impact various products and regions.

By Nachiket Tekawade and Aparupa Mazumder

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