Europe & Africa Market Update 9 Oct

Bunker prices in Rotterdam, Gibraltar and Durban have moved in mixed directions, and longer lead times are recommended for deliveries in Port Louis.

IMAGE: A bulk carrier in Port Louis. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($33/mt), Rotterdam ($16/mt) and Gibraltar ($13/mt)
• LSMGO prices up in Durban ($88/mt), Rotterdam ($37/mt), and down in Gibraltar ($21/mt)
• HSFO prices down in Gibraltar ($9/mt), Rotterdam ($7/mt) and Durban ($4/mt)

Rotterdam’s LSMGO price has gained sharply in the past day, while Gibraltar’s LSMGO price has dropped. This has narrowed Gibraltar’s price premium over Rotterdam by $58/mt in a single day.

Durban’s LSMGO price has also gained sharply in the past day, supported by a 150-500 mt LSMGO stem fixed at a higher price of $2,299/mt.

Port Louis’ VLSFO price has tanked $74/mt in the past day, more sharply than in Durban. A 500-1,500 mt lower-priced VLSFO stem fixed in Port Louis at $1,004/mt has put additional downward pressure on the port’s benchmark.

Port Louis’ VLSFO price discount to Durban has widened by $41/mt in the past day to $247/mt.

Durban’s VLSFO price has surged by around $260/mt in the past one month, while Port Louis’ price has remained largely steady. This has flipped Port Louis’ VLSFO benchmark price from a premium of around $40/mt to a discount of $247/mt in that period.

Fuel availability in Port Louis remains tight for prompt supplies, and buyers are recommending lead times of 10-15 days to secure deliveries in the port, a trader told ENGINE.

Brent

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

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 Nachiket Tekawade and Aparupa Mazumder

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