Europe & Africa Market Update 25 Aug

Bunker fuel prices in European and African ports have moved in mixed directions, and bunker supplies off Malta requires lead times of 3-4 days.

IMAGE: Tankers during a bunker operation off Malta. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($17/mt), Gibraltar ($14/mt) and Rotterdam ($5/mt)
• LSMGO prices down in Durban ($33/mt), Gibraltar ($30/mt) and Rotterdam ($26/mt)
• HSFO prices down in Rotterdam ($20/mt), Gibraltar ($15/mt) and Durban ($12/mt)
• B30-VLSFO prices down in Gibraltar ($28/mt) and Rotterdam ($18/mt)

LSGMO prices across several ports have declined over the past session.

In the Gibraltar strait, although the price of LSMGO has declined at Gibraltar, Algeciras’ LSMGO benchmark has seen a sharper drop of $67/mt.

This has flipped Algeciras’ LSMGO price to a $29/mt discount to Gibraltar, compared to a $8/mt price premium seen yesterday.

In the offshore bunkering areas off Malta, LSMGO price has dropped mostly in line with Gibraltar, dropping $24/mt. It is now trading at a $36/mt price premium over Gibraltar.  

Comparatively, LSMGO has marginally dipped by just $3/mt in Greece’s Piraeus. A higher-priced 150-500 mt stem, fixed at $1,422/mt, has supported the Greek LSMGO benchmark and limited its drop.

In Turkey’s Istanbul, LSMGO price has decreased by $56/mt over the day, weighed down by a lower-priced, 50-150 mt stem of $1,443/mt.

Consequently, Malta’s LSMGO price premium over Piraeus has narrowed by $21/mt in the past day, while Malta’s price discount to Istanbul has narrowed by $32/mt.

Fuel availability is stable off Malta, with lead times of 3-4 days sufficient for getting deliveries of VLSFO, LSMGO and ULSFO supplies, a trader told ENGINE.

Brent

The front-month ICE Brent contract has declined $2.64/bbl on the day, to trade at $90.14/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has managed to trade above the $90/bbl mark, as oil flow through the Strait of Hormuz continues to remain severely choked.

As of yesterday, only four commercial ships transited the strait, with one vessel navigating the passage with its AIS transponder switched off, market intelligence provider Windward reported.

This meagre count marks a staggering plunge from pre-war traffic levels, which typically hovered around 140 daily transits.

“Persian Gulf producers have partially offset the impact of the Strait of Hormuz disruption by relying on alternative export routes, but these remain fragile,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has declined this morning, as the oil market seems largely unfazed by the US’ economic campaign against Iran, market analysts said.

“Oil prices drifted lower… despite renewed US plans to tighten economic pressure on Iran,” two analysts from ING Bank said.

The US announced nearly 60 Iran-related sanctions and threatened imposing secondary sanctions on international allies who continue trading with Iran.

Yet, the oil market remains sceptical about how severely these measures will actually constrict global crude flows and demand growth.

Oil traders are viewing Washington’s “effort to nudge partners away from Iranian trade as marginal rather than market‑moving,” ING Bank’s analysts remarked.

By Nachiket Tekawade and Aparupa Mazumder

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