Europe & Africa Market Update 17 July

European and African bunker benchmarks have mostly moved up, and fuel availability is tight for prompt supplies in Durban.

IMAGE: Above view of Durban Harbour, South Africa. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($19/mt) and Rotterdam ($8/mt), and down in Durban ($42/mt)
• LSMGO prices up in Rotterdam ($24/mt), Gibraltar ($9/mt) and Durban ($2/mt)
• HSFO prices up in Rotterdam ($4/mt), Durban ($3/mt) and Gibraltar ($1/mt)
• B30-VLSFO prices down in Rotterdam ($2/mt)

Most conventional bunker benchmarks have gained in the past day, tracking gains in Brent.

However, Durban’s VLSFO price has dropped significantly. A large stem of between 500-1,500 mt, fixed at a low price of $700/mt, has put downward pressure on the benchmark.

Meanwhile, the South African port’s HSFO price has edged up slightly, narrowing the port’s Hi5 spread by $45/mt over the past day. This significantly decreases the economic benefit of bunkering HSFO at the port.

Fuel availability in the port is tight for prompt deliveries, with buyers advised booking stems 5-7 days ahead for good coverage, a trader said.

Around seven vessels are expected to call in Durban between 17 July – 4 August for bunkers, the Transnet Port Authority said.

Brent

The front-month ICE Brent contract has gained by $0.87/bbl on the day, to trade at $85.11/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has jumped back above the $85/bbl mark following fresh threats from Iran to broaden the regional conflict to the Red Sea and the Bab al-Mandeb Strait.

Iran has instructed Yemen-based Houthi militants to prepare attacks on the Bab al-Mandeb Strait, if the US strikes Iran’s power infrastructure, Reuters reported.

Bab al-Mandeb is another vital oil chokepoint like the Strait of Hormuz, carrying about 7% of global seaborne oil flows.

Any new attacks in the region threatens to deepen the global energy crisis, as traffic through the Strait of Hormuz is already facing severe disruption.

“Oil prices continue to move higher, with neither the US nor Iran showing any real intent to dial down the latest surge in tensions,” two analysts from ING Bank noted.

Downward pressure:

Brent’s rally was partially capped after US President Donald Trump cancelled plans to impose a 20% fee of a cargo’s value for the US to assist in safely transiting the Strait of Hormuz.

Trump has pivoted from his earlier proposal, focusing instead on forging new trade deals with Gulf countries.

By Nachiket Tekawade and Aparupa Mazumder

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