Europe & Africa Market Update 14 Aug

Bunker prices in European and African ports have increased, and reduced visibility due to fog is causing congestion in Gibraltar.

IMAGE: Thick fog in Gibraltar today. MH Bland

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($11/mt), Rotterdam ($8/mt) and Gibraltar ($3/mt)
• LSMGO prices up in Rotterdam ($20/mt), Gibraltar ($19/mt) and Durban ($13/mt)
• HSFO prices up in Gibraltar ($6/mt), Durban ($4/mt) and Rotterdam ($1/mt)
• B30-VLSFO prices down in Rotterdam ($18/mt)

Bunker benchmarks have gained over the past day, tracking an increase in Brent.

Algeciras' VLSFO benchmark has inched up by $2/mt. A large 500-1,500 mt stem has been fixed at $647/mt has limited further gains. The port's HSFO price has jumped $17/mt in the past session.

Due to the HSFO’s sharper climb, the port’s Hi5 spread has narrowed by $15/mt to $82/mt. That is considerably narrower than Gibraltar's $135/mt spread.

Bunker availability of all fuel grades is tight in Gibraltar Strait ports, with buyers advised lead times of 7-10 days, a trader said.

Meanwhile, fog has reduced visibility around Gibraltar to around 200 metres, the Gibraltar Port Authority said in a warning. The fog is expected to gradually lift and break up through the morning and early afternoon, the port authority said.

Ships calling to bunker in Gibraltar face congestion. Around 23 vessels were waiting on Friday morning, port agent MH Bland said, citing visibility issues in the bay as the major reason.

Some Gibraltar suppliers are running around 24-36 hours behind on deliveries, the port agent added. In Algeciras, some suppliers are delayed by 12-24 hours, according to MH Bland.

Brent

The front-month ICE Brent contract has gained by $0.46/bbl on the day, to trade at $87.83/bbl at 09.00 GMT.

Upward pressure:

Brent’s price is poised to end the week higher than it began, amid growing hostilities between the US and Iran, in the Middle East.

The US Central Command (CENTCOM) has established a “multinational attack drone task force,” it said.

The unit – called Task Force Falcon Strike – will deploy one-way attack drones on targets in the Middle East, consisting of unmanned systems operated by military support staff from the US and regional partners, CENTCOM said.

Downward pressure:

Brent’s price has felt some downward pressure after global oil watchdogs slashed oil demand projection for 2026.

The Organization of the Petroleum Exporting Countries (OPEC) has reduced its global oil demand growth projection for 2026, to about 600,000 b/d.

Meanwhile, Paris-based International Energy Agency (IEA) expects global oil demand to shrink by 1.6 million b/d in 2026.

“The IEA now expects global oil demand to fall by 1.6m b/d YoY in 2026 [1.6 million b/d year-on-year] due to Persian Gulf disruptions and elevated fuel prices,” two analysts from ING Bank noted.

By Nachiket Tekawade and Aparupa Mazumder

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