East of Suez Market Update 16 Dec

Bunker prices in East of Suez ports have mostly declined, and VLSFO availability remains tight in Fujairah.

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

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

• VLSFO prices down in Zhoushan ($15/mt), Fujairah ($9/mt) and Singapore ($7/mt)
• LSMGO prices down in Zhoushan ($37/mt), Fujairah ($20/mt) and Singapore ($15/mt)
• HSFO prices up in Fujairah ($1/mt), and down in Zhoushan ($11/mt) and Singapore ($3/mt)
• B30-VLSFO at a $263/mt premium over VLSFO in Singapore
• B30-VLSFO at a $277/mt premium over VLSFO in Fujairah

Across Asia’s three major bunker hubs, prices have broadly tracked Brent’s downward trend, with Zhoushan recording the steepest declines.

Zhoushan’s LSMGO price has fallen by a whopping $37/mt in the past day, marking the steepest decline among the three ports, followed by Fujairah and Singapore. This has positioned the Chinese port’s LSMGO price at a discount of $54/mt to Fujairah, while it remains at a $20/mt premium over Singapore.

Fujairah's VLSFO price has declined sharply in the past session, trading at discounts of $23/mt and $5/mt to Zhoushan and Singapore, respectively.

VLSFO and LSMGO availability remains tight in Fujairah, according to a source.

Brent

The front-month ICE Brent contract has plunged by $1.45/bbl on the day, to trade at $59.83/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

The European Union (EU) on Monday sanctioned four shipping companies and five individuals for supporting Russia’s shadow fleet operations. These entities have direct or indirect ties to Russian oil companies Rosneft and Lukoil – both of which are also subject to US sanctions since October, according to the EU Council.

This news has provided some support to Brent’s price today.

These shipping companies own or manage shadow fleet tankers restricted by the EU or by other countries, the bloc said in a statement. 

Downward pressure:

Brent crude’s price has plunged below the $60/bbl mark amid growing hopes of a potential ceasefire deal between Russia and Ukraine.

The US government has offered to provide “NATO-style security guarantees” to Kyiv, Reuters reported, signalling potential commitments by allied countries to safeguard Ukraine’s territorial integrity and political independence.

“Crude oil fell as the market weighed up signs of optimism on a peace deal being reached between Russia and Ukraine,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Besides, European negotiators reported progress in talks to end the four-year long conflict, the report added. These developments have raised market expectation of a peace deal – sooner than later.

“Oil markets will be watching developments closely, given the significant supply risk from sanctions on Russia,” remarked two analysts from ING Bank.

By Aparupa Mazumder

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