Ongoing Middle East crisis further tightens Fujairah bunker supply

Bunker fuel availability has tightened sharply at the UAE ports of Fujairah and Khor Fakkan, with only a limited number of suppliers currently offering fuel and many responding selectively to enquiries, according to a trader.

IMAGE: Bunker barge at berth in Fujairah, UAE. Port of Fujairah

“Middle Eastern ports are currently operating with improved but still unstable conditions following the [partial] reopening of the Strait of Hormuz. Overall situation is better compared to the previous period, however availability remains limited in some locations,” a regional source said.

“Overall, the market is improving, but remains sensitive and subject to prompt changes in availability and pricing,” the source added.

In Fujairah, only one supplier currently has stocks of VLSFO and LSMGO available, with most offers being issued on a firm enquiry basis. HSFO availability is slightly better, as two suppliers are able to supply the grade.

In Khor Fakkan, supply remains tight across all fuel grades, with suppliers evaluating requests on a case-by-case basis.

The supply crunch is largely driven by a shortage of incoming cargoes, leaving bunker barges without product to load. Although fresh cargo arrivals were expected over the past two weeks, there is still no clear indication of when they will arrive.

Fuel oil imports have been declining steadily since March amid the ongoing Middle East crisis. Imports averaged just 14,000 b/d in March, fell to zero in April, and recovered only marginally to a meagre 7,000 b/d in May, according to cargo tracking firm Vortexa.

Barges that had already loaded fuel continue to supply the market until their inventories are depleted, but most of these volumes have already been sold. Suppliers warn that Fujairah and Khor Fakkan could effectively run out of bunker fuel within days if expected cargoes fail to arrive and the remaining barge stocks become fully committed.

The trader added that even if replenishment cargoes arrive, bunker prices are likely to remain at elevated premium levels.

Fujairah’s VLSFO price is currently trading at a substantial premium of $214/mt over both Singapore and Zhoushan.

Bunker availability in Dubai also remains constrained, with suppliers providing offers only against firm enquiries. Elsewhere in the UAE, port operations at Jebel Ali, Hamriyah and Sharjah are continuing normally, according to Inchcape Shipping. Ports in Ras Al Khaimah remain fully operational as well, although RAK Ports authority has been maintaining a marine risk surcharge on vessels calling at its ports, harbours and anchorages since March.

By Tuhin Roy

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