East of Suez Market Update 25 Aug

Most prices in East of Suez ports have declined, while VLSFO availability is tight in Singapore.

IMAGE: Aerial view of Singapore container terminal. Getty Images

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

• VLSFO prices down in Zhoushan ($25/mt), Singapore ($21/mt) and Fujairah ($7/mt)
• LSMGO prices down in Singapore ($39/mt), Fujairah and Zhoushan ($9/mt)
• HSFO prices up in Fujairah ($9/mt), and down in Zhoushan ($9/mt) and Singapore ($8/mt)

VLSFO prices across the three major Asian bunker ports have fallen by $7-25/mt over the past day. Singapore’s VLSFO is currently priced at a $6/mt premium to Fujairah, while trading at a $10/mt discount to Zhoushan.

Singapore’s LSMGO price has dropped by $39/mt over the past day, marking the steepest decline among the three ports. It is currently at discounts of $228/mt to Fujairah and $83/mt to Zhoushan.

Singapore’s VLSFO availability remains tight, with lead times varying significantly between suppliers. Some are recommending around seven days, while others are advising lead times of up to 19 days. Last week, recommended lead times stood at 7-13 days. A source attributed the tight availability to reduced supply among suppliers.

HSFO lead times currently stand at 6-12 days, broadly unchanged from 6-13 days last week. LSMGO availability has also tightened, with lead times increasing to 4-9 days from 2-8 days a week earlier.

In Malaysia’s Port Klang, bunker supply remains constrained. Prompt VLSFO availability is tight, LSMGO supply remains limited and HSFO continues to face pressure.

Brent

The front-month ICE Brent contract has declined $2.64/bbl on the day, to trade at $90.14/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has managed to trade above the $90/bbl mark, as oil flow through the Strait of Hormuz continues to remain severely choked.

As of yesterday, only four commercial ships transited the strait, with one vessel navigating the passage with its AIS transponder switched off, market intelligence provider Windward reported.

This meagre count marks a staggering plunge from pre-war traffic levels, which typically hovered around 140 daily transits.

“Persian Gulf producers have partially offset the impact of the Strait of Hormuz disruption by relying on alternative export routes, but these remain fragile,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has declined this morning, as the oil market seems largely unfazed by the US’ economic campaign against Iran, market analysts said.

“Oil prices drifted lower… despite renewed US plans to tighten economic pressure on Iran,” two analysts from ING Bank said.

The US announced nearly 60 Iran-related sanctions and threatened imposing secondary sanctions on international allies who continue trading with Iran.

Yet, the oil market remains sceptical about how severely these measures will actually constrict global crude flows and demand growth.

Oil traders are viewing Washington’s “effort to nudge partners away from Iranian trade as marginal rather than market‑moving,” ING Bank’s analysts remarked.

By Tuhin Roy and Aparupa Mazumder

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