East of Suez Market Update 28 Aug

Most prices in East of Suez ports have moved higher, while LSMGO availability remains good across 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 ($16/mt), Zhoushan ($14/mt) and Singapore ($10/mt)
• LSMGO prices up in Fujairah ($32/mt), Singapore ($18/mt) and Zhoushan ($14/mt)
• HSFO prices up in Fujairah ($11/mt), Singapore ($10/mt), and down in Zhoushan ($1/mt)
• B30-VLSFO price up in Singapore ($25/mt)

VLSFO prices across the three major Asian bunker ports have risen by $10-16/mt over the past day. Fujairah’s VLSFO is currently at premiums of $28/mt over Singapore and $19/mt over Zhoushan.

Tensions between the US and Iran over the Strait of Hormuz continue to constrain bunker fuel supply in Fujairah. VLSFO and LSMGO availability remains tight and broadly unchanged from last week, with only a limited number of suppliers currently able to offer LSMGO.

Bunker fuel supply remains constrained at Qatar’s Ras Laffan port, with availability of both VLSFO and LSMGO limited.

“Operations are currently ongoing across the Middle Eastern ports,” an Oman-based trader said.

In Oman’s key bunkering hubs — Salalah, Muscat, Duqm and Sohar — LSMGO availability remains stable. Suppliers generally recommend lead times of 2-3 days, depending on the port and nomination.

Brent

The front-month ICE Brent contract has gained by $1.91/bbl on the day, to trade at $89.54/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has risen after Tehran blacklisted 45 vessels and threatened to impose hefty penalties on those that violate its regulations for transiting the Strait of Hormuz.

The announcement comes after Washington vowed sweeping economic sanctions against Tehran, in a bid to drive the OPEC producer’s oil and petroleum product export revenues to zero.

The US announced nearly 60 Iran-related sanctions and threatened of secondary sanctions on the Islamic Republic’s international allies – like China. 

“Oil prices edged higher as prospects for renewed US-Iran talks diminished,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price has felt some downward pressure following a surprise build in US crude stocks.

Commercial US crude oil inventories increased by 95,000 bbls to 429 million bbls in the week ending 21 August, according to data from the US Energy Information Administration (EIA).

The data followed a bigger build of 4.2 million bbls, reported by the American Petroleum Institute (API) during the same week.

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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