Most prices in East of Suez ports have moved up, and several Middle Eastern ports could face weather disruptions this week.

PHOTO: An aerial view of Sohar Port and Freezone. Sohar Port and Freezone

Changes on the day to 17.00 SGT (09.00 GMT) today:

• VLSFO prices up in Fujairah and Zhoushan ($8/mt), and down in Singapore ($1/mt)
• LSMGO prices up in Zhoushan ($14/mt) and Fujairah ($13/mt), and down in Singapore ($4/mt)
• HSFO prices up in Singapore and Zhoushan ($4/mt) and Fujairah ($1/mt)

In the past day, most bunker benchmarks in East of Suez ports have followed Brent's upward trend. Fujairah and Zhoushan's VLSFO prices have risen by $8/mt each, while Singapore's price has been relatively stable. A higher-priced VLSFO stem fixed in Zhoushan today has contributed to pushing the benchmark up. Consequently, Zhoushan's VLSFO discount to Singapore has been erased. The port's benchmark now stands at a marginal premium of $4/mt over Singapore and at parity levels with Fujairah.

All bunker fuel grades remain readily available in Zhoushan, with lead times of 2-5 days recommended by several suppliers.

Bunker demand has improved in the UAE port of Fujairah. Most suppliers are advising lead times of around seven days for all grades in the port. However, the port is currently witnessing strong winds and waves, which might impact barge deliveries there. The bad weather is likely to persist till Thursday, which could complicate bunker deliveries.

The UAE ports of Khor Fakkan, Dubai, Saqr and Ras Al Khaimah are also facing adverse weather conditions, which are likely to continue till Thursday. Bad weather conditions could affect bunkering in these ports.

Most suppliers are recommending lead times of around seven days across all bunker fuel grades in Khor Fakkan.

Port operations in Dubai remain restricted, while the ports of Saqr and Ras Al Khaimah are on alert, according to GAC Hot Port News.

Brent

The front-month ICE Brent contract gained $0.42/bbl on the day, to trade at $90.07/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

After shedding some gains at the start of the week, Brent’s price has again risen above the $90/bbl mark amid heightened geopolitical tensions in the Middle East.

Iran launched over 300 drones and missiles on Israel over the weekend. “This marks an unprecedented and dangerous development in an already volatile region,” said Jorge León, senior vice president for oil market research at Rystad Energy.

Oil market analysts are now closely monitoring Israel’s response to the recent attack as further escalation of the Middle Eastern conflict could expose “the crude oil market to further price hikes,” remarked SPI Asset Management’s managing partner Stephen Innes.

“Oil traders are now closely scrutinizing whether the recent Iran attack represents a ‘one-and-done’ scenario, a determination that will wield significant influence over financial [oil] markets,” he added.

Brent futures also gained after China reported stronger-than-expected gross domestic product (GDP) data for the first quarter of this year. The country’s GDP grew at a rate of 5.3%, Reuters reported. Positive GDP data shows that China’s economy is growing, which in turn could boost oil demand in the country.

Downward pressure:

China’s latest crude import data has weighed on Brent futures. On a daily basis, the country imported 11.55 million b/d of crude oil in March, down around 6% from 12.32 million b/d during the same time in 2023, market intelligence provider JLC reported.

The decline in imports has sparked concerns about weakening demand growth in China, which could prompt Brent futures to lose further upward momentum.

This “lacklustre” import figure has raised questions about China’s stimulus measures and its efficiency towards a complete post-COVID economic recovery, Innes said.

Besides, OPEC has ample spare capacity that can offset supply disruptions due to a broader geopolitical conflict in the Middle East, according to analysts.

“The market is comforted by the fact that OPEC has ample spare oil capacity ready should supply be disrupted,” argued ANZ Bank’s senior commodity strategist Daniel Hynes.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online