East of Suez Market Update 18 Feb

Prices in East of Suez ports have moved within a narrow range, and availability of all grades is tight in Singapore.

IMAGE: Cargo terminal at the Port of Singapore. Getty Images

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

• VLSFO prices down in Zhoushan ($3/mt), Fujairah ($2/mt) and Singapore ($1/mt)
• LSMGO prices down in Zhoushan ($5/mt), Fujairah ($3/mt) and Singapore ($2/mt)
• HSFO prices down in Zhoushan ($6/mt), Fujairah ($5/mt) and Singapore ($1/mt)
• B30-VLSFO prices down in Singapore ($8/mt) and Fujairah ($4/mt)

VLSFO prices across the three major Asian bunker hubs have remained broadly steady over the past day. Singapore’s VLSFO is at a premium of $9/mt over Fujairah, while at a discount of $15/mt to Zhoushan.

In Singapore, VLSFO supply continues to be tight, with recommended lead times of 8–13 days, broadly steady compared to 9–13 days last week. HSFO availability is also constrained, although lead times have narrowed to 8–12 days from 7–18 days previously. LSMGO supply typically requires 6–10 days, compared with a wider 2–10-day range last week.

The ongoing tightness reflects overlapping factors, including uneven lead times among suppliers, higher premiums for prompt stems, and fully booked loading schedules.

At Port Klang, VLSFO and LSMGO are generally well supplied—especially for smaller prompt volumes—while HSFO remains tight and relatively difficult to secure.

Brent

The front-month ICE Brent contract has declined by $0.33/bbl on the day, to trade at $67.61/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has held its ground after the US army seized another Venezuela-linked oil tanker allegedly carrying sanctioned oil.

The US Department of War (DoW) said in a statement that the Panamanian-flagged oil tanker Veronica III was seized in the Indian Ocean.

The move marks the second such incident in a week, according to Price Future Group’s senior market analyst Phil Flynn.

“Tracked all the way from the Caribbean, the vessel [Veronica III] was carrying nearly 2 million barrels [bbls] of crude and fuel oil linked to sanctioned Venezuelan networks,” Flynn said.

The US government has said it will continue its efforts to crack down on Venezuelan and Iranian oil trade, which the Donald Trump-led administration has deemed illicit.

Downward pressure:

Brent’s price has moved lower amid signs of a breakthrough in US-Iran nuclear negotiations, held in Geneva yesterday.

Washington and Tehran have reached an understanding on “guiding principles” aimed at discussing the latter’s nuclear enrichment programme, Reuters reported citing Iran’s Foreign Minister Abbas Araqchi.

Meanwhile, a representative from Washington said that Iran will submit a detailed proposal in the coming two weeks, in a step to take yesterday's discussions forward, Reuters reported.

However, it is important to note that yesterday’s discussions don’t mean that a final deal has been cracked between the two countries.

“The decline [in Brent’s price] was largely driven by reports that Iran has reached a “general agreement” with the US on the terms of a potential deal,” two analysts from ING Bank noted.

By Tuhin Roy and Aparupa Mazumder

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