East of Suez Market Update 4 Mar

Prices across East of Suez ports have climbed for a third consecutive day, while bunker supply in Fujairah has been disrupted amid the ongoing Middle East crisis.

IMAGE: Vessel docked at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices up in Singapore ($33/mt), Fujairah ($31/mt) and Zhoushan ($25/mt)
• LSMGO prices up in Singapore ($151/mt), Fujairah ($117/mt) and Zhoushan ($36/mt)
• HSFO prices up in Fujairah ($57/mt), Singapore ($40/mt) and Zhoushan ($23/mt)
• B30-VLSFO prices up in Fujairah ($11/mt) and Singapore ($9/mt)

LSMGO prices in Singapore and Fujairah have surged, pushing them above the $900/mt mark and to their highest levels since September–October 2023.

During that period in 2023, LSMGO prices across East of Suez ports climbed due to tight global diesel supplies, Russia’s temporary diesel export ban, and firmer crude prices following production cuts by OPEC+.

The current rally is being driven by escalating geopolitical tensions in the Middle East, supply disruptions in Fujairah, and broader strength in global distillate markets, including diesel and jet fuel.

Bunker deliveries in the UAE port of Fujairah have been widely disrupted after a fire broke out on Tuesday at the Fujairah Petroleum Industrial Estate (FOIZ), caused by falling debris after air defense systems intercepted a drone. No injuries were reported, and authorities have since brought the fire under control and resumed operations.

Although no formal operational alerts have been issued, the Port of Fujairah authority has warned mariners about intermittent GPS spoofing and jamming in nearby offshore areas, which could lead to inaccurate positioning, erratic vessel movements, or false navigational signals.

Most bunker suppliers have nevertheless halted deliveries due to uncertainty around loadings as some terminals remain closed, a source said.

Brent

The front-month ICE Brent contract has gained by $2.72/bbl on the day, to trade at $83.86/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has remained elevated amid mounting risk of supply disruptions through the ‌Strait of Hormuz – a critical chokepoint through which almost 20% of the world’s oil transits.

Several regional players have halted operations at their facilities in the region, with Iraq joining the queue most recently.

Baghdad has curtailed production from the Rumaila oil ​field by 700,000 b/d, from the West Qurna 2 oil field by 460,000 b/d and ⁠from the Maysan oil field by 325,000 b/d, Reuters reported.

Brent’s price moved higher “following reports that Iraq had cut output at the giant Rumaila oil field and appeared poised to shutter about 3mb/d [3 million b/d] of output, if the crisis persists,” ANZ Bank’s senior commodity strategist Daniel Hynes wrote.

A fire at storage facilities at the UAE port of Fujairah led to some operation shutdowns yesterday. Fujairah is one of the largest oil export hubs near the Strait of Hormuz.

The “sprawling conflict” adds further concerns to the escalating security risks for energy infrastructure across the Persian Gulf region, Hynes said.

Downward pressure:

Brent’s price has felt some downward pressure after the American Petroleum Institute (API) reported a surge in US crude stocks.

US crude oil inventories gained by 5.6 million bbls in the week ending 27 February, according to the API.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

Official inventory data from the US Energy Information Administration (EIA) will be released later today.

By Tuhin Roy and Aparupa Mazumder

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