Brent Prices Rise Amid Escalating Tensions with Iran
The European and African bunker fuel market has experienced price increases across various regions. In Durban, VLSFO prices rose to $23/mt, while in Gibraltar, prices for VLSFO and LSMGO increased by $20/mt and $38/mt respectively. Rotterdam saw a $16/mt increase in VLSFO and $28/mt rise in LSMGO prices.
In the region off Malta, fuel prices have mostly followed the Brent price trend, but with some notable exceptions. The ULSFO price jumped by $35/mt in one day, giving it a $31/mt premium over ULSFO offered in Algeciras, Spain. However, LSMGO and VLSFO availability is tighter off Malta, requiring 6-7 days of lead time for ULSFO and normal 1-3 days notice for LSMGO and VLSFO.
The recent price movement can be attributed to the Brent crude contract's gain of $1.91/bbl on the day, reaching $89.54/bbl. The increase in Brent prices is largely due to heightened tensions between the US and Iran, with Tehran blacklisting 45 vessels and threatening penalties for those violating regulations in the Strait of Hormuz.
However, a surprise build in US crude stocks has put some downward pressure on Brent's price, offsetting some of the upward momentum. Commercial US crude oil inventories increased by 95,000 bbls to 429 million bbls in the week ending August 21.