Fujairah’s LSMGO premium over Singapore widens by around $180/mt since September

Fujairah’s LSMGO price stood around $430/mt above Singapore’s this week, up from around $250/mt at the start of September.

Fujairah’s LSMGO monthly average reached around $1,720/mt in October, the highest since November 2021. The port's premium over Singapore was around $460/mt on 19 October.

Supplies of LSMGO and HSFO at the UAE port remain limited, and vessel traffic through the Strait of Hormuz remains disrupted amid US-Iran tensions, a regional source said. Fujairah’s fuel oil stocks averaged 9% lower in October so far than across September, Fujairah Oil Industry Zone (FOIZ) and S&P Global data showed. Middle distillate stocks fell 27,000 bbls, to 2.40 million bbls.

A market source said Fujairah is vulnerable to sudden shifts in availability due to reduced barge capacity, despite muted demand amidst reginal escalations and vessel attacks.

The source said MGO is particularly exposed to a global diesel shortage, with Asian imports of light and middle distillates still below pre-war levels in October, in addition to constrained Middle Eastern refined-product supplies.

Fujairah’s VLSFO price traded at a discount to Singapore’s of up to around $20/mt on each weekday from 27 October to 2 November. Singapore’s price reached around $1,000/mt on 30 October, as fuel oil inventories tightened and supply flows fell. Last week, VLSFO lead times at the port started at around 13 days, with some suppliers recommending more than three weeks.

Singapore’s residual fuel oil inventories averaged 6% lower in October than in September.

The gap reversed on 3 November, when Fujairah’s VLSFO price rose around $20/mt and Singapore’s fell around $20/mt. Fujairah’s VLSFO now trades at a premium of around $20/mt over Singapore, against around $50/mt on 1 September. VLSFO availability at Fujairah has improved, a regional source said.

By Tuhin Roy

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