Europe & Africa Market Update 21 Aug

Bunker fuel prices in European and African ports have declined, and LSMGO supply is tight in Turkey’s 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 Durban ($17/mt), Gibraltar ($6/mt) and Rotterdam ($4/mt)
• LSMGO prices down in Durban ($28/mt), Rotterdam ($20/mt) and Gibraltar ($17/mt)
• HSFO prices down in Gibraltar, Durban ($4/mt) and Rotterdam ($1/mt)
• B30-VLSFO prices down in Rotterdam ($19/mt) and Gibraltar ($7/mt)

Bunker benchmarks have declined in most regional ports over the past session, pressured by the fall in Brent.

The price of LSMGO off Malta and in Greece’s Piraeus have dropped $46/mt and $41/mt, respectively. These declines are sharper than the $22/mt price drop in Istanbul's LSMGO.

Consequently, Istanbul’s LSMGO price premium over Malta and Piraeus have dropped between $19-24/mt in the past session.

Istanbul’s VLSFO price has seen a steep $64/mt drop over the past day. A very low-priced, 150-500 mt stem, fixed at $832/mt, has weighed on the port’s VLSFO price.

LSMGO fuel availability is tight at Istanbul, a local supplier told ENGINE, while HSFO, VLSFO and ULSFO deliveries are more readily available.

Brent

The front-month ICE Brent contract has moved $0.76/bbl lower on the day, to trade at $92.91/bbl at 09.00 GMT.

Upward pressure:

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

Washington has vowed to drag the war, with President Donald Trump announcing sweeping economic sanctions on Iran and its allies.

Countries providing any type of financial support to Iran will “face TREMENDOUS Economic Consequences”, Trump said in a post on social media platform Truth Social.

Meanwhile, commercial vessels transiting the region have continued to come under drone assaults.

A merchant ship travelling west in the Gulf of Aden, about 36 nautical miles east of Al Mukalla, Yemen, was hijacked yesterday, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The tanker has been boarded by six armed persons who are now in control of the vessel and redirecting to Somalia,” the UKMTO said.

Downward pressure:

While there is no new downward pressure acting on Brent, its price rally was capped after the US Energy Information Administration (EIA) reported a surprise rise in US crude stocks yesterday.

Commercial US crude oil inventories increased by 4.4 million bbls to 429 million bbls in the week ending 14 August, according to data from the EIA.

“This [EIA’s report] contrasted sharply with API's reported 328k barrel [328,000 bbls] draw and market expectations for a 74k barrel decline,” two analysts from ING Bank noted.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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