East of Suez Market Update 22 July

Prices across East of Suez ports have moved higher, while LSMGO availability is good at several Omani ports.

IMAGE: Port of Salalah in Oman during the twilight hours. Getty Images

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

• VLSFO prices up in Fujairah ($42/mt), Zhoushan ($30/mt) and Singapore ($21/mt)
• LSMGO prices up in Fujairah ($85/mt), Singapore ($75/mt) and Zhoushan ($64/mt)
• HSFO prices up in Zhoushan ($38/mt), Singapore and Fujairah ($35/mt)
• B30-VLSFO price up in Singapore ($64/mt)

Fujairah's VLSFO price has surged by $42/mt over the past day, marking the sharpest increase among the three major Asian bunker hubs. The port's VLSFO price is now at premiums of $40/mt to Singapore and $25/mt to Zhoushan.

Bunker fuel availability has improved in Fujairah. Supplies of VLSFO and LSMGO have become more readily available, with several suppliers now able to meet prompt delivery requirements. HSFO availability, however, has tightened and is being offered largely on a firm enquiry basis.

Neighbouring UAE bunker hub Khor Fakkan is experiencing similar supply conditions.

"Despite the recent challenges (escalating US-Iran hostilities) in the region, operations across the main Middle Eastern ports continue to run normally with no significant disruptions," a Middle East-based source said.

In Oman, LSMGO availability remains generally stable, with indicative lead times of approximately 2–3 days, subject to berth availability. Market prices are gradually increasing; however, the upward trend remains moderate and within reasonable levels,” an Omani trader said.

Brent

The front-month ICE Brent contract has gained by $5.51/bbl on the day, to trade at $94.29/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has gained by more than $5/bbl, as hopes of a temporary US-Iran ceasefire have faded after US President Donald Trump ruled out any chances of immediate talks.

The US Central Command (CENTCOM) has conducted the 11th consecutive day of strikes against Iran, targeting Tehran’s maritime capabilities, aircraft hangars, drone storage facilities and logistics infrastructure, it said.

“Oil prices pushed higher again yesterday amid mounting supply risks as hopes fade for a temporary ceasefire between the US and Iran,” two analysts from ING Bank noted.

Additionally, Yemen’s Iran-backed Houthi militants imposed a maritime embargo on vessels carrying Saudi Arabian crude through the Bab al-Mandeb Strait into the Red Sea.

Three Saudi oil tankers reversed course in the Red Sea following the Houthi announcement, Reuters reported.

“The Houthis' announced maritime blockade on Saudi Arabia has shippers nervous, with several tankers moving to avoid the Bab el-Mandeb Strait,” ING Bank’s analysts added.

Downward pressure:

Brent’s price felt some downward pressure following an unexpected increase in US crude stocks.

US crude oil inventories increased by 2.6 million bbls in the week ending 17 July, according to estimates from the American Petroleum Institute (API).

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

By Tuhin Roy and Aparupa Mazumder

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