Europe & Africa Market Update 7 Sep

Bunker prices in European and African ports have moved in mixed directions over the weekend, while ships are facing long bunkering queues in Gibraltar.

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Durban ($27/mt), and down in Rotterdam ($19/mt) and Gibraltar ($14/mt)
• LSMGO prices up in Rotterdam ($26/mt), Gibraltar ($18/mt) and Durban ($5/mt)
• HSFO prices up in Rotterdam ($4/mt), Durban ($2/mt), and down in Gibraltar ($1/mt)
• B30-VLSFO price down $56/mt in Rotterdam

VLSFO prices in Rotterdam and Gibraltar have dropped by $14-19/mt over the weekend, while LSMGO prices in the ports have increased $18-26/mt in the same period.

Gibraltar’s VLSFO price is at a narrow premium of $19/mt over Rotterdam, while its LSMGO price is at a much sharper $156/mt premium.

Gibraltar's VLSFO price premium has significantly narrowed over the past month, while its LSMGO price premium has almost doubled, from $81/mt on 6 August to the current level.

Gibraltar’s VLSFO price premium has narrowed, from $79/mt on 6 August to the current level.

Fuel availability is tight for prompt deliveries in the Gibraltar Strait, with recommended lead times of 10-12 days for good coverage from suppliers, a trader said.

Ships visiting Gibraltar for bunkering are facing congestion, with around 18 vessels awaiting bunkers as of Monday morning mostly due to unavailability of barges or lack of space, port agent MH Bland said.

Some suppliers are reporting delays of more than 24 hours, the port agent added.

Brent

The front-month ICE Brent contract has gained by $1.44/bbl on the day from Friday, to trade at $96.56/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has moved higher following major escalation in the Middle East region.

The US Navy struck three Iran-linked crude oil tankers over the weekend, the US Central Command (CENTCOM) said on social media platform X.

“The oil market remains well-supported with little sign of peace between the US and Iran,” two analysts from ING Bank noted.

The action came shortly after Iranian forces launched ballistic missiles toward two US warships patrolling regional waters, CENTCOM said.

Meanwhile, Tehran has threatened a new “restricted zone” outside the Strait of Hormuz, Al Jazeera reported.

If imposed, the move “could put additional vessels in the Gulf of Oman at risk,” ING Bank’s analysts added.

Downward pressure:

Brent crude’s price has faced little downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by two over the week to 449 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Nachiket Tekawade and Aparupa Mazumder

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