Europe & Africa Market Update 16 Dec

Bunker fuel prices in major European and African ports have slumped over the past day, and fuel availability remains normal in Istanbul.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Rotterdam ($20/mt), Durban ($16/mt) and Gibraltar ($6/mt)
• LSMGO prices down in Rotterdam ($12/mt) and Gibraltar ($11/mt)
• HSFO prices down in Gibraltar ($17/mt), Durban ($16/mt) and Rotterdam ($8/mt)

Bunker benchmarks in all three ports have fallen considerably, tracking the decline in Brent.

In Rotterdam, the price of VLSFO has fallen more than its HSFO price, narrowing the Hi5 spread by $12/mt to $40/mt.

Meanwhile, Gibraltar’s Hi5 spread has widened by $11/mt to $60/mt, due to its HSFO price falling more steeply compared to its VLSFO price.

Similarly, Istanbul's Hi spread has also increased over the past session.

The Turkish port's LSMGO price has seen a steep $24/mt price decline over the past session, narrowing its premium over Gibraltar by $13/mt, to just $4/mt. A lower-priced stem of less than 50 mt, fixed at $685/mt, may have put some downward pressure on the benchmark.

Fuel availability in Istanbul remains normal, with buyers able to secure supplies of VLSFO, ULSFO and LSMGO supplies with a 1-3-day notice, a local supplier told ENGINE.

Brent

The front-month ICE Brent contract has plunged by $1.45/bbl on the day, to trade at $59.83/bbl at 09.00 GMT.

Upward pressure:

The European Union (EU) on Monday sanctioned four shipping companies and five individuals for supporting Russia’s shadow fleet operations. These entities have direct or indirect ties to Russian oil companies Rosneft and Lukoil – both of which are also subject to US sanctions since October, according to the EU Council.

This news has provided some support to Brent’s price today.

These shipping companies own or manage shadow fleet tankers restricted by the EU or by other countries, the bloc said in a statement. 

Downward pressure:

Brent crude’s price has plunged below the $60/bbl mark amid growing hopes of a potential ceasefire deal between Russia and Ukraine.

The US government has offered to provide “NATO-style security guarantees” to Kyiv, Reuters reported, signalling potential commitments by allied countries to safeguard Ukraine’s territorial integrity and political independence.

“Crude oil fell as the market weighed up signs of optimism on a peace deal being reached between Russia and Ukraine,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Besides, European negotiators reported progress in talks to end the four-year long conflict, the report added. These developments have raised market expectation of a peace deal – sooner than later.

“Oil markets will be watching developments closely, given the significant supply risk from sanctions on Russia,” remarked two analysts from ING Bank.

By Nachiket Tekawade and Aparupa Mazumder

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