Europe & Africa Market Update 4 Aug

Bunker fuel prices in Europe and Africa have moved in mixed directions, while prompt fuel availability is tight in the Gibraltar Strait.

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($29/mt) and Rotterdam ($9/mt), and down in Gibraltar ($1/mt)
• LSMGO prices up in up in Durban ($43/mt) and Gibraltar ($5/mt), and down in Rotterdam ($65/mt)
• HSFO prices up in Gibraltar ($14/mt) and Durban ($6/mt), and down in Rotterdam ($7/mt)
• B30-VLSFO prices up in Rotterdam ($48/mt)

Gibraltar’s LSMGO price premium over Rotterdam has surged by $70/mt over the past day, to $76/mt. However, the port's LSMGO is trading at discounts of $86/mt to Greece’s Piraeus, and $69/mt to LSMGO off Malta.

LSMGO prices have surged across these three Mediterranean ports over the past month, but the price increase has been comparatively less sharp in Gibraltar.

Gibraltar’s LSMGO price has increased $294/mt, or 29%, in the last one month, while Piraeus and off Malta’s LSMGO price has increased between $359-366/mt, or 35-36%, during the same period.

Fuel availability is tight in the Gibraltar Strait ports, with buyers advised lead times of around a week for deliveries of all grades, a trader said.

Suppliers may be delayed by around 4-12 hours in Gibraltar, while some suppliers are running delayed by up to 36 hours in Algeciras, port agent MH Bland said.

Brent:

The front-month ICE Brent contract has gained by $2.09/bbl on the day, to trade at $86.07/bbl at 09.00 GMT.

Upward pressure:

Oil has reversed yesterday’s losses, as market participants grow sceptical of US President Donald Trump's peace rhetoric, and the likelihood of reaching an agreement anytime soon.

“We’ve been in this situation multiple times before, only to see things unravel,” two analysts from ING Bank noted.

The US Central Command (CENTCOM) is “looking for new creative and unconventional ways to pressure and punish Iran” as it continues to enforce the US blockade against Iran, CNN reported, citing an unnamed CENTCOM officer.

As of yesterday, CENTCOM has redirected 44 commercial vessels, disabled two, and boarded two, to prevent them from entering or departing Iranian ports, it said on social media platform X.

“With Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation,” ING Bank’s analysts said.

Downward pressure:

While there are no major downward pressures acting on Brent today, market analysts will continue to keep a close eye on any signs of de-escalation in the Middle East and evolving developments in US-Iran diplomacy.

Brent’s price gains were capped “after the US and Iran signalled that discussions about restoring shipping through the Strait of Hormuz had resumed,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Nachiket Tekawade and Aparupa Mazumder

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