East of Suez Market Update 9 July

Most prices in East of Suez ports have moved down, and VLSFO availability is good in Fujairah.

IMAGE: Aerial view of the Port Botany in Sydney, Australia. Getty Images

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

• VLSFO prices up in Fujairah ($12/mt), and down in Zhoushan ($17/mt) and Singapore ($9/mt)
• LSMGO prices down in Fujairah ($29/mt), Singapore ($26/mt) and Zhoushan ($16/mt)
• HSFO prices down in Zhoushan ($22/mt), Fujairah ($9/mt) and Singapore ($5/mt)
• B30-VLSFO price down in Singapore ($14/mt)

Fujairah’s VLSFO price has increased by $12/mt over the past day, while prices in Zhoushan and Singapore have declined. The benchmark was supported by a higher-priced 500–1,500 mt VLSFO stem fixed during the day, helping it buck the downward pressure from Brent crude. As a result, Fujairah’s VLSFO is now trading at premiums of $23/mt to Singapore and $18/mt to Zhoushan.

Bunker fuel availability in Fujairah remains mixed. Most suppliers are able to offer prompt VLSFO stems, while LSMGO supply is limited. HSFO supply remains tight, although some suppliers are still able to offer the grade.

In Western Australia, VLSFO availability remains steady. Suppliers in Kwinana and Fremantle are generally recommending lead times of around seven days. Bunkering at both ports continues to be carried out by a single supplier using barges.

In eastern Australia, one supplier is now offering LSMGO by pipeline at Botany. Meanwhile, a supplier's HSFO bunker barge in Brisbane is expected to remain out of service for one week due to maintenance, which could affect HSFO bunker deliveries at the port.

Brent

The front-month ICE Brent contract has declined by $1.16/bbl on the day, to trade at $77.54/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent has received some support as tensions between the US and Iran continued to escalate, with the US launching fresh strikes on Iran to keep the Strait of Hormuz open to shipping. The latest military action prompted Iranian retaliatory attacks on Kuwait and Bahrain.

“Fresh US strikes on Iran pushed oil higher this morning, with the latest escalation undermining confidence in the fragile ceasefire,” two analysts from ING Bank said.

Separately, Russia, on Wednesday, banned diesel exports through the end of July to stabilise its domestic fuel market after Ukrainian drone attacks on refineries triggered fuel shortages and sharp price increases, according to Reuters.

“Adding to supply concerns in the oil market, and specifically in middle distillates, Russia announced a ban on the export of diesel until the end of July,” ING Bank analysts added.

Downward pressure:

After a rapid increase in Brent yesterday, the price increase has slowed down and reversed slightly.

Market participants have also likely started assessing the impact of the fresh US strikes on Iran, which has weighed on market sentiment.

Brent came under some downward pressure after the US Energy Information Administration (EIA) released its latest weekly oil inventory data.

US commercial crude oil inventories rose by 3 million bbls to 411.4 million bbls in the week ending 3 July, according to the EIA.

By Tuhin Roy

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