Europe & Africa Market Update 14 Apr

Bunker benchmarks at European and African ports have fallen, while prompt supplies are tight in the Gibraltar Strait.

IMAGE: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($163/mt), Gibraltar ($48/mt) and Rotterdam ($38/mt)
• LSMGO prices down in Gibraltar ($136/mt) and Rotterdam ($61/mt)
• HSFO prices down Gibraltar ($55/mt) and Rotterdam ($40/mt)
• B30-VLSFO price down in Rotterdam ($87/mt) and Gibraltar ($68/mt)

Bunker fuel prices in European and African ports have mostly fallen over the past day, weighed down by Brent’s fall.

Gibraltar’s LSMGO price has fallen more sharply than Rotterdam’s. This has narrowed the Mediterranean port's LSMGO premium over Rotterdam by around $75/mt in a single day.

Fuel availability is tight for prompt dates at the Gibraltar Strait ports, and buyers are advised to enquire around 7-10 days in advance to get good coverage from suppliers, a trader said.

Demand is stable in Gibraltar, with around 54 vessels expected to call at the port between 14-25 April, shipping agent A Mateos & Sons said.

Additionally, bunkering has been suspended off Malta due to rough winds and high swells since early in the week and is expected to resume later in the day, port agent MH Bland said.

Brent

The front-month ICE Brent contract has declined by $4.55/bbl on the day, to trade at $98.21/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has remained well supported by supply disruption concerns in the Middle East after the US military announced enforcing a blockade in the Strait of Hormuz.

US President Donald Trump said that Washington will block every vessel coming in and out of Iranian ports – multiplying concerns about crude oil flows through the region.  

A US blockade, which came into force yesterday, can curtail about 3 to 4 million b/d of regional crude oil supply, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

Iran has already issued fresh threats to target vessels and ports in response to the US blockade, Al Jazeera reported.

“The US naval action could test the fragile ceasefire and raise the prospect of a re-escalation of the Middle East conflict,” Hynes said.

Downward pressure:

Brent’s price rally lost steam after Trump said Iran “wants to make a deal.” The comments came during a last-minute press conference at the White House yesterday, The Guardian reported.

“This suggests financial markets continue to look through the conflict to possible barrels being back on the market,” Hynes said.

However, Trump said during the press brief that Washington will not agree to a peace deal unless Tehran gives up its nuclear ambitions completely.

Diplomatic efforts to restart a dialogue between the US and Iran are continuing, with Pakistan reportedly offering to host the next round of talks in Islamabad, Al Jazeera reported.

“Oil is trading on the likelihood of de-escalation rather than outright supply disruption,” SPI Asset Management managing partner Stephen Innes said.

By Nachiket Tekawade and Aparupa Mazumder

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