East of Suez Market Update 29 June

Prices in East of Suez ports have moved in mixed directions, and VLSFO availability is tight in Zhoushan.

IMAGE: An aerial view of Taichung Port. Taiwan Free Trade Zone 1

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

• VLSFO prices up in Zhoushan ($66/mt), and down in Fujairah ($77/mt) and Singapore ($22/mt)
• LSMGO prices up in Singapore ($23/mt), Zhoushan ($22/mt), and down in Fujairah ($35/mt)
• HSFO prices up in Singapore ($4/mt), and down in Fujairah ($58/mt) and Zhoushan ($43/mt)

Zhoushan's VLSFO price has surged by $66/mt over the weekend, while benchmark prices in Fujairah and Singapore have declined. As a result, Zhoushan's VLSFO has shifted from a discount to a $37/mt premium over Singapore, although it remains at a substantial $176/mt discount to Fujairah.

Zhoushan's HSFO price, meanwhile, has declined, widening the port's Hi5 spread to $235/mt from $111/mt. The spread remains significantly narrower than Fujairah's $381/mt, but is now slightly wider than Singapore's $214/mt.

Despite subdued bunker demand, VLSFO supply remains tight in Zhoushan. Recommended lead times have extended from 7–10 days last week to 7–12 days now, adding upward pressure to the benchmark price. Lead times for both LSMGO and HSFO have also increased to 5–7 days from just three days previously.

Bunker fuel availability remains stable across Taiwan's major ports of Hualien, Keelung, Taichung and Kaohsiung. Recommended lead times for both VLSFO and LSMGO remain at around two days in all four ports, largely unchanged from last week.

Brent

The front-month ICE Brent contract has inched $0.01/bbl higher on the day from Friday, to trade at $72.57/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has felt upward pressure amid renewed strikes in the Middle East.

Over the weekend, the US and Iran exchanged fire – further destabilising the region and threatening the fragile 60-day US-Iran peace deal.

Iran’s navy struck a Panama-flagged oil tanker that was attempting to transit the Strait of Hormuz on Saturday. The vessel was carrying over 2 million bbls of crude oil.

In response, the US Central Command (CENTCOM) launched strikes on Iranian military targets.

Simultaneously, the Israel Defense Forces (IDF) confirmed strikes on three command centers in Nabatieh and Mayfadoun in Lebanon, further complicating the geopolitical landscape that underpin the stability of the Middle East region.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a big rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by seven to 440 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening, or expected to happen, in the shale sector.

By Tuhin Roy and Aparupa Mazumder

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