East of Suez Market Update 10 Sep

Prices in East of Suez ports have risen, and availability is tight for all grades across several Japanese ports.

IMAGE: Mountain Fuji and the Keihin Industrial Zone near the Tokyo-Yokohama area, Japan. Getty Images

Changes on the day to 17.00 SGT (09.00 GMT) today:

• VLSFO prices up in Fujairah ($29/mt), Zhoushan ($5/mt) and Singapore ($1/mt)
• LSMGO prices up in Zhoushan ($50/mt), Fujairah ($34/mt) and Singapore ($25/mt)
• HSFO prices up in Fujairah, Zhoushan ($16/mt) and Singapore ($11/mt)
• B30-VLSFO price up in Singapore ($23/mt)

Fujairah’s VLSFO price has climbed by $29/mt, the steepest increase among the three major Asian bunker ports. The price now stands at a $46/mt premium to Singapore and a $27/mt premium to Zhoushan.

The port’s HSFO price has also risen, increasing by a more modest $16/mt. Consequently, Fujairah’s Hi5 spread has widened from $224/mt to $237/mt, moving above Zhoushan’s $201/mt and Singapore’s $191/mt.

US-Iran tensions over the Strait of Hormuz continue to disrupt bunker fuel availability in Fujairah. Supplies of all major grades are described as “super tight”, as fuel oil imports have fallen sharply amid heightened regional tensions.

In Japan, lead times for VLSFO, LSMGO and HSFO are around 7-10 days at Tokyo, Chiba and Kawasaki. Suppliers at Nagoya, Yokkaichi, Osaka, Kobe, Mizushima, Tokuyama and Oita are indicating lead times of 10-12 days. Kashima remains tight for both VLSFO and HSFO.

Brent

The front-month ICE Brent contract has gained by $1.94/bbl on the day, to trade at $102.30/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price is trading above the $100/bbl mark for the first time in two months, as the global oil market continues to price in persistent geopolitical risk, with tensions between the US and Iran showing no viable path to de‑escalation.

“If anything, current signals point to further escalation, keeping upside pressure firmly in place,” two analysts from ING Bank said.

The US Central Command (CENTCOM) said it has destroyed 10 Iranian oil tankers over the past week that were part of Tehran’s “multibillion-dollar” shadow fleet network funding the IRGC.

“Oil prices continued to climb, with Brent breaking above $100/bbl, as prospects for de-escalation between the US and Iran remained elusive, raising concerns over the security of energy flows,” ING Bank’s analysts said.

Downward pressure:

While Brent’s price is under limited downward pressures today, market participants await US Energy Information Administration (EIA) crude inventory data, scheduled for release tomorrow.

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

The crude stocks report has been delayed this week due to the US Labour Day holiday.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online