East of Suez Market Update 9 Oct

Prices in East of Suez ports have fallen, and availability of all major grades remains severely constrained in Fujairah.

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

• VLSFO prices down in Zhoushan ($36/mt), Fujairah ($35/mt) and Singapore ($24/mt)
• LSMGO prices down in Singapore ($47/mt), Fujairah ($29/mt) and Zhoushan ($14/mt)
• HSFO prices down in Zhoushan ($36/mt), Fujairah ($17/mt) and Singapore ($10/mt)
• B30-VLSFO price down in Singapore ($18/mt)

Fujairah’s VLSFO price has fallen by $35/mt, just behind Zhoushan’s $36/mt drop. The price now stands at a $75/mt premium over Singapore and a $52/mt premium over Zhoushan.

Fujairah’s Hi5 spread has narrowed from $286/mt to $268/mt, still above Singapore’s $93/mt and Zhoushan’s $39/mt.

Fujairah’s VLSFO monthly average rose from $768/mt in July to $806/mt in August and $938/mt in September and stands at $965/mt for October so far. That is more than double the $460/mt average for last October.

“Fujairah remains the most sensitive market, with availability and pricing moving more aggressively, while Saudi ports are generally more workable but need to be checked case by case,” a Middle East-based source said.

Availability in Fujairah remains severely tight, as continuing US-Iran tensions disrupt vessel traffic through the Strait of Hormuz, another regional source said. Supplies of all major grades are extremely limited, and fuel oil arrivals have dropped sharply amid heightened uncertainty across the region.

In Saudi Arabia, VLSFO and LSMGO supplies remain stable in Jeddah.

Brent

The front-month ICE Brent contract has lost by $1.12/bbl on the day, to trade at $103.06/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price is poised to end the week higher, with an increasing number of vessels coming under attack this week and Washington renewing its focus on Tehran’s shadow tanker fleet.

On Wednesday, an oil tanker was struck by multiple unknown projectiles within the Strait of Hormuz, resulting in casualties, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The pace of attacks on oil tankers in the Strait of Hormuz increased in recent days, with the UK Maritime Trade Operations reporting nine attacks in the waterway so far this month,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

To add onto the pressure, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) targeted 17 more shadow fleet vessels, that allegedly continue to evade US sanctions by transporting Iranian petroleum and petrochemicals.

Downward pressure:

US President Donald Trump said Washington would not launch any new attacks on Iran before the US midterm elections in November.

“We will not be attacking Iran ​at any time prior to the midterm elections to be held in ​the United States on November 3rd,” Trump wrote on social media platform Truth Social.

Brent crude’s price rose 6% in the previous session before giving back some of those gains following Trump’s statement, Hynes said.

Some improvement in oil exports out of the Middle East has also put downward pressure on Brent’s price today.

Kuwait is producing at 75% of pre-war levels, while Saudi Arabia has reduced the official selling price (OSP) of the Arab Light to Asia for November loadings. Iraq is hiring additional vessels to send oil through the Strait of Hormuz.

By Tuhin Roy and Aparupa Mazumder

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