East of Suez Market Update 23 June

Prices in East of Suez ports have moved in mixed directions, and availability of VLSFO and LSMGO is good across several Taiwanese ports.

IMAGE: Aerial view Zhoushan City, Zhejiang Province. Getty Images

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

• VLSFO prices down in Zhoushan ($36/mt), Fujairah ($29/mt) and Singapore ($9/mt)
• LSMGO prices up in Zhoushan ($59/mt), Singapore ($4/mt), and down in Fujairah ($14/mt)
• HSFO prices up in Singapore ($6/mt), Fujairah ($5/mt), and down in Zhoushan ($8/mt)
• B30-VLSFO price down in Singapore ($20/mt)

Zhoushan’s VLSFO price has fallen by $36/mt over the past day, marking the sharpest decline among the three major Asian bunker hubs. As a result, Zhoushan’s VLSFO is now priced at discounts of $382/mt to Fujairah and $38/mt to Singapore.

Prompt VLSFO supply in Zhoushan remains tight despite subdued demand. Suppliers are recommending lead times of around seven days, compared with 7–10 days last week. Availability of LSMGO and HSFO is comparatively better, with recommended lead times of around three days, improving from 3–5 days a week earlier.

Bunker fuel availability remains steady across Taiwan’s major ports of Hualien, Keelung, Taichung and Kaohsiung. Recommended lead times for both VLSFO and LSMGO are about two days in Hualien and Keelung, while deliveries in Taichung and Kaohsiung require around 2–3 days. These lead times are largely unchanged from the previous week.

Brent

The front-month ICE Brent contract has declined by $1.93/bbl on the day, to trade at $77.36/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

While there are no specific upward pressures acting on Brent’s price today, market analysts will keep an eye on developments in Lebanon.

The Israel Defense Forces (IDF) struck targets in southern Lebanon over the weekend, breaching a key provision of the US-Iran peace deal signed in France last week.

Any further regional hostilities risk reigniting market anxiety, as they raise the possibility of Iran once again closing the Strait of Hormuz.

Downward pressure:

Brent crude’s price came under downward pressure after the US Department of Treasury (DoT) waived some sanctions linked to Iranian oil sale.

The temporary 60-day general license will authorise the production, delivery and sale of Iranian crude and petrochemical products to global markets, the treasury department said.

Oil “weakened as the US announced a temporary sanctions waiver on Iranian oil exports,” two analysts from ING Bank said.

The license will allow Iranian-origin oil sale made by US dollar-denominated funds, according to the treasury department.

Meanwhile, the gradual increase in oil flows through the Strait of Hormuz and positive outcomes from yesterday’s US-Iran talks in Switzerland have put downward pressure on prices today.

“Iran had already started ramping up exports following the lifting of the US blockade. This sanctions waiver will open more markets for Iran to sell its oil, including the US,” ING Bank’s analysts added.

By Tuhin Roy and Aparupa Mazumder

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