Europe & Africa Market Update 11 Aug

Bunker prices in European and African ports have increased, while prompt fuel availability is tight in the ARA.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($35/mt), Durban ($32/mt) and Rotterdam ($21/mt)
• LSMGO prices up in Gibraltar ($78/mt), Durban ($71/mt) and Rotterdam ($8/mt)
• HSFO prices up in Durban ($26/mt), Gibraltar ($21/mt) and Rotterdam ($20/mt)
• B30-VLSFO prices up in Rotterdam and Gibraltar ($61/mt)

Regional bunker fuel prices have tracked the rise in Brent's price.

The price of LSMGO in Gibraltar has seen a sharp rise, while Rotterdam’s LSMGO price has gained very modestly.

A small stem of less than 50 mt, fixed in Rotterdam at a low price of $1,206/mt, and another stem of between 50-150 mt also fixed at a low price of $1,175/mt, have put downward pressure on the Dutch port’s LSMGO benchmark.

Consequently, Rotterdam’s LSMGO price discount to Gibraltar has widened by $70/mt in a single day.

The Dutch port‘s ULSFO benchmark price has dropped by $63/mt, weighed down by lower priced 50-150 mt stems, fixed between $889-984/mt.

Fuel availability is tight in the ARA hub for prompt delivery dates, with buyers advised lead times of around 5-7 days to get good coverage from suppliers, a trader told ENGINE.

Brent

The front-month ICE Brent contract has gained by $5.36/bbl on the day, to trade at $89.92/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has gained by more than $5/bbl over the last session as the little remaining hope of a swift de-escalation between Washington and Tehran fades.

Iran’s announcement of six sweeping preconditions to reopen the Strait of Hormuz, followed by US President Donald Trump’s response has put upward pressure on oil this week.

Iran would consider reopening the critical waterway after its demands are met, it said earlier. In response, Trump demanded that Iran pay “compensation” to Washington for war-related damages.

“The oil market remains very headline-driven, which leaves prices whipsawing,” two analysts from ING Bank noted.

“The latest bout of optimism is quickly fading, with demands for war reparations from Iran, which President Trump rejected,” ING Bank’s analysts said.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts are keeping an eye out for any developments in the Iran-Oman agreement to reopen the Strait of Hormuz.

Last week, Tehran said it was getting closer to finalising a deal with Oman, regarding jointly managing the Strait of Hormuz.

By Nachiket Tekawade and Aparupa Mazumder

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