Europe & Africa Market Update 23 June

Bunker prices across major European and African ports have mostly dropped, while fuel availability is tight for prompt deliveries in the ARA.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($13/mt), and down in Durban ($29/mt) and Gibraltar ($13/mt)
• LSMGO prices up in Gibraltar ($5/mt), and down in Rotterdam ($18/mt) and Durban ($15/mt)
• HSFO prices down in Rotterdam ($30/mt) and Gibraltar ($7/mt)
• B30-VLSFO prices up in Gibraltar ($98/mt) and Rotterdam ($6/mt)

Regional bunker benchmarks have mostly dropped over the past session, tracking Brent's fall.

Rotterdam’s HSFO price has fallen more sharply than Gibraltar's, weighed down by a significantly lower-priced 500-1500 mt stem fixed at $469/mt.

Conversely, Rotterdam’s VLSFO price has edged higher since yesterday.

These diverging price movements have widened the port’s Hi5 spread by $43/mt to $128/mt, over a single day. This offers a significant financial incentive to scrubber-fitted ships calling at Rotterdam to bunker HSFO.

Rotterdam's LSMGO benchmark has declined, in line with the broader market, while the grade's price has increased at Gibraltar. This has widened the Dutch port's LSMGO price discount by $23/mt to $126/mt.

Fuel availability of all grades in the ARA is tight for prompt delivery dates, a trader told ENGINE.

Buyers are recommended long lead times of around 7-8 days for VLSFO and HSFO stems, and around six days for LSMGO, the trader added.

Brent

The front-month ICE Brent contract has declined by $1.93/bbl on the day, to trade at $77.36/bbl at 09.00 GMT.

Upward pressure:

While there are no specific upward pressures acting on Brent’s price today, market analysts will keep an eye on developments in Lebanon.

The Israel Defense Forces (IDF) struck targets in southern Lebanon over the weekend, breaching a key provision of the US-Iran peace deal signed in France last week.

Any further regional hostilities risk reigniting market anxiety, as they raise the possibility of Iran once again closing the Strait of Hormuz.

Downward pressure:

Brent crude’s price came under downward pressure after the US Department of Treasury (DoT) waived some sanctions linked to Iranian oil sale.

The temporary 60-day general license will authorise the production, delivery and sale of Iranian crude and petrochemical products to global markets, the treasury department said.

Oil “weakened as the US announced a temporary sanctions waiver on Iranian oil exports,” two analysts from ING Bank said.

The license will allow Iranian-origin oil sale made by US dollar-denominated funds, according to the treasury department.

Meanwhile, the gradual increase in oil flows through the Strait of Hormuz and positive outcomes from yesterday’s US-Iran talks in Switzerland have put downward pressure on prices today.

“Iran had already started ramping up exports following the lifting of the US blockade. This sanctions waiver will open more markets for Iran to sell its oil, including the US,” ING Bank’s analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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