Marine Fuel Prices Drop in East of Suez Amid Supply Tightness
Prices for marine fuels in East of Suez ports have dropped, with severe supply restrictions reported in Fujairah. The VLSFO price fell by $29 per metric ton to $942/mt, matching declines in Singapore but lagging behind Zhoushan’s $55/mt drop. Fujairah’s benchmark now stands at an $82/mt premium over Singapore, unchanged from the previous day, and a $58/mt premium over Zhoushan, up from $32/mt.
The Hi5 spread in Fujairah narrowed to $262/mt but remains significantly higher than Singapore’s $112/mt and Zhoushan’s $45/mt. Supply constraints persist due to US-Iran tensions disrupting vessel traffic through the Strait of Hormuz, with fuel oil arrivals sharply declining. Similar tight supply conditions are reported in nearby Khor Fakkan.
The front-month ICE Brent contract lost $3.55 per barrel, trading at $99.00/bbl. Geopolitical risks, including escalating tensions between Saudi Arabia and Yemen’s Iran-aligned Houthis, have kept Brent prices well-supported. The Houthis struck Saudi Aramco’s refinery in Rabigh and warned international airlines against using Saudi airspace, citing it as an active war zone.
ING Bank analysts noted growing signs of oil flow recovery from the Persian Gulf, but the market remains nervous about potential supply disruptions. Downward pressure on Brent prices came from the G7’s announcement of releasing up to 100 million barrels of emergency crude oil stocks over the next four months. Kuwait’s oil production has rebounded to 75% of pre-war levels, and Saudi Arabia cut the official selling price of Arab Light crude for November loadings, indicating an improving supply picture.