Prices in East of Suez ports have moved up, and availability of all grades has improved in Singapore.

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

• VLSFO prices up in Fujairah ($11/mt), Zhoushan ($5/mt) and Singapore ($4/mt)
• LSMGO prices up in Singapore ($19/mt), Fujairah ($18/mt) and Zhoushan ($11/mt)
• HSFO prices up in Singapore ($17/mt), Fujairah ($14/mt) and Zhoushan ($7/mt)
• B24-VLSFO at a $222/mt premium over VLSFO in Singapore
• B24-VLSFO at a $239/mt premium over VLSFO in Fujairah

VLSFO benchmarks in the three major Asian bunker ports have increased by $4–11/mt over the past day. In Singapore, VLSFO is priced at a premium of $8/mt over Zhoushan and $7/mt over Fujairah.

Singapore's LSMGO price has seen the steepest increase among the three ports in the past day, rising by $19/mt. Despite this increase, Singapore's LSMGO remains at a discount of $117/mt to Fujairah and $42/mt to Zhoushan.

Bunker availability in Singapore has improved this week amid subdued demand. VLSFO lead times have shortened from 9–17 days last week, to 6–13 days now. HSFO lead times are down to around 5–9 days, while LSMGO lead times have been revised from 3–10 days last week to 3–7 days now.

In Japan, Tokyo's LSMGO grade remains at a significant premium of $267/mt over Singapore.

While LSMGO supply in Japan is generally stable, securing prompt deliveries can be difficult in Osaka, Kobe, Sakai, Nagoya, Yokkaichi and Mizushima. HSFO availability is mostly steady, but prompt deliveries can be difficult in Nagoya, Yokkaichi and Mizushima.

Prompt VLSFO supply remains tight across several Japanese ports, including Tokyo, Chiba, Yokohama, Kawasaki, Osaka, Kobe, Sakai, Nagoya, Yokkaichi and Mizushima.

In Oita, all fuel grades are available subject to enquiry.

Brent

The front-month ICE Brent contract has moved $1.14/bbl higher on the day, to trade at $66.34/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Tighter US sanctions on Iranian oil have supported Brent’s price gains today. The US government has sanctioned two vessels and nearly two dozen firms, for allegedly transporting Iranian oil.

These vessels and their owners facilitated transport of oil and petroleum products on behalf of Iran’s Armed Forces General Staff (AFGS), according to the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). One of the “key catalyst” to oil prices “is the threat of further sanctions on Iranian oil exports,” two analysts from ING Bank remarked.

US President Donald Trump has also warned that Washington will exert maximum pressure on Tehran’s oil exports if a nuclear deal with the OPEC+ member is not reached soon, according to market reports.

Trump’s announcement was “backed up by the US State Department, which said that it’s sanctioning an international network facilitating the shipment of Iranian crude to China,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

However, some of the losses in the global oil market from the clampdown on Iranian oil exports may be offset by increased output from the OPEC+ alliance.

In April, the Vienna-headquartered group surprised the oil market by tripling its planned production hike to 411,000 b/d for May and agreed to extend that increase through June – the second month in a row. The group plans to expedite the unwinding of its 2.2 million b/d output cut.

“Expectations are rising that Saudi Arabia may push for another acceleration of production hikes the group have already approved,” Hynes added.

On the demand side, Brent’s price felt some downward pressure after the American Petroleum Institute (API) reported a sizeable increase in US crude stocks.

US crude oil inventories rose by 4.3 million bbls in the week ending 9 May, according to API estimates. The data has surprised market analysts as they predicted a draw in US crude stocks.

The API numbers were “very different from the roughly 2m [2 million] barrel draw the market expected,” ING Bank analysts noted.

A buildup in inventories typically signals weaker oil demand, which can put downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

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