Europe & Africa Market Update 16 July

European and African bunker benchmarks have moved in mixed directions, and Gibraltar’s port congestion has reduced significantly.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($20/mt) and Rotterdam ($4/mt), and down in Durban ($8/mt)
• LSMGO prices up in Gibraltar ($56/mt) and Rotterdam ($11/mt), and down in Durban ($32/mt)
• HSFO prices up in Gibraltar ($2/mt), and down in Durban ($14/mt) and Rotterdam ($1/mt)
• B30-VLSFO prices down in Rotterdam and Gibraltar ($8/mt)

Gibraltar’s LSMGO bunker price has surged over the past day. A large stem of more than 1,500 mt, fixed at a high price of $1,272/mt, has provided support to the benchmark.

Comparatively, Rotterdam’s LSMGO price has increased lesser than at Gibraltar. Consequently, Gibraltar's price premium has widened by $45/mt in a single day.

The VLSFO price at the Mediterranean port has increased more sharply compared to its HSFO, which has widened the port’s Hi5 spread by $18/mt, in a single day, to $121/mt. This increases the economic benefit for scrubber-fitted ships to bunker HSFO.

Congestion seen earlier in the week at Gibraltar has come down, as suppliers clear backlogs. Only seven vessels are now waiting for bunkers, down from more than 20 yesterday, port agent MH Bland said.

Some suppliers in Gibraltar and neighbouring Algeciras are still delayed by around 12-24 hours on deliveries, the port agent added.  

Prompt fuel availability remains tight in the Gibraltar Strait ports, with buyers advised longer lead times, a trader said.

Brent

The front-month ICE Brent contract has inched $0.44/bbl lower on the day, to trade at $84.24/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt some upward pressure after the US Energy Information Administration (EIA) reported a decline in US crude stocks.

Commercial US crude oil inventories decreased by 1.7 million bbls, to 409.7 million bbls, in the week ending 10 July, according to data from the EIA.

A drop in US crude stocks can indicate higher demand for oil and put some upward pressure on Brent's price.

“US commercial crude oil inventories remain near the lowest levels since 2022, while seasonally they are at their lowest level since 2018,” two analysts from ING Bank noted.

Downward pressure:

US President Donald Trump quickly abandoned plans to impose a 20% fee of a cargo’s value for the US to assist in safely transiting the Strait of Hormuz – this has continued to put some downward pressure on Brent’s price.

Moving away from his previous “reimbursement fee” rhetoric, Trump now aims to secure trade deals with Gulf states instead.

The US administration has remained silent on the specifics of the trade and investment framework Trump claims these nations will adopt with Washington.

By Nachiket Tekawade and Aparupa Mazumder

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