Stockpiles of oil products at the Port of Fujairah have sharply declined, hitting levels near a record low due to significant drawdowns in fuel oil and light distillates. This tightness is occurring alongside strong demand for ship fuels at the major bunkering hub.
Overall Stockpile Contraction
The total oil products stockpile at the UAE’s Port of Fujairah dropped by 11% in the week ending September 29, reaching 13.328 million barrels. This figure is close to the all-time low set just two weeks prior. The total volume is now down 14% since the end of 2024 and has fallen by 23% since the end of 2023, reflecting a sustained inventory drawdown trend.
Key Product Drawdowns
The decline was primarily driven by the heavy and light distillate categories:
- Heavy Distillates (Fuel Oil): These stockpiles, used for shipping and power generation, saw the most significant weekly fall, dropping 17% to 5.509 million barrels. This brought inventory back near a six-year low. The volume is dramatically down 84% since the end of 2023.
- Light Distillates (Gasoline, Naphtha): Stockpiles in this category slipped 11% to 5.928 million barrels, the lowest level recorded since late November 2024.
The only category to show an increase was Middle Distillates (including jet fuel and diesel), which rose 17% to a three-week high of 1.891 million barrels.
Bunker Market Tightness and Price Premiums
The inventory contraction is reflected in the local ship fuel market:
- High-Sulfur Fuel Oil (HSFO) demand from term contract buyers was described as healthy, leading some suppliers to delay deliveries until later in October. This strong demand pushed the average price premium for Fujairah-delivered HSFO over its reference cargo price to $13.32 per metric ton (mt) in September, up from $12.50/mt in August.
- Low-Sulfur Fuel Oil (LSFO) also saw its delivered premium increase sharply, averaging $13.15/mt over Singapore cargo values in September, a significant jump from $7.68/mt in August. Suppliers noted that LSFO was more readily available for refueling in early October compared to HSFO.
Total refined products exports from the port remained relatively stable in September, averaging 666,000 barrels per day (b/d).
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Source: S&P Global
