- Oil product inventories at the Port of Fujairah rose 3.3% in the week to August 25, led by a sharp 23% surge in jet fuel and other middle distillates.
- Heavy distillates used as fuel oil rebounded 5.6% but remain down 14% for the year, while light distillates posted their first decline in a month yet stayed well above year-end levels.
- Tightness in low-sulfur fuel oil (LSFO) supply supported stronger bunker premiums, even as high-sulfur fuel oil (HSFO) premiums softened on adequate stockpiles and steady replenishment cargoes.
Oil product stockpiles at the UAE’s Port of Fujairah increased by 3.3% in the week ending August 25, reaching 16.009 million barrels, according to data from the Fujairah Oil Industry Zone. The rise followed a period of inventory weakness, when volumes had fallen to near-record lows, and brought total holdings up 3% since the end of 2024. Middle distillates led the rebound, surging 23% week-on-week to 1.886 million barrels, reversing earlier losses and leaving stockpiles 4.2% higher for the year, according to S&P Global.
Distillates and Fuel Oil Trends
Heavy distillates, primarily used as fuel oil in shipping and power generation, climbed 5.6% from the prior week’s multi-year low to 6.463 million barrels. Despite the gain, stocks remain 14% lower than at the close of 2024. Light distillates, including gasoline and naphtha, slipped 2.3% to 7.660 million barrels, marking their first decline in four weeks, though they continued to exceed fuel oil volumes for a third consecutive week. Light product inventories are now 26% above year-end levels.
Export Activity
Refined product exports from Fujairah averaged 551,000 b/d in August, down from 667,000 b/d in July, according to S&P Global Commodities at Sea. Fuel oil remained the leading export at 222,000 b/d, followed by gasoline at 107,000 b/d and gasoil/diesel at 106,000 b/d.
High-Sulfur Fuel Oil (HSFO) Market
Traders noted that HSFO stockpiles were largely adequate, with healthy downstream demand helping to support premiums. Barge availability tightened slightly for late August deliveries but remained comfortable for early September schedules. At least three replenishment cargoes, sourced within the Middle East and ranging from MR to LR1 sizes, recently arrived at the hub. However, HSFO premiums softened, with the Platts-assessed delivered Fujairah 380 CST HSFO bunker premium averaging $12.40/mt in August, down from $14.91/mt in July.
Low-Sulfur Fuel Oil (LSFO) Market
The LSFO segment showed more supply tightness. Procurement delays for key feedstocks such as Dar blend crude created logistical bottlenecks, limiting ex-wharf availability for some local suppliers. As a result, prompt LSFO stocks were leaner, lead times lengthened, and delivered premiums strengthened. On August 26, the Platts-assessed Fujairah-delivered LSFO premium over FOB Singapore values reached $13.47/mt, its highest since early March. Average LSFO bunker premiums for August climbed to $6.65/mt, up from $4.77/mt in July.
While middle distillates and heavy fuel oil are rebounding from recent lows, supply-chain constraints in the LSFO market continue to underpin stronger premiums. With exports easing from July’s levels and inventories recovering, Fujairah’s product balances are entering September with greater stability, though segment-specific tightness remains a key driver of bunker pricing.
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Source: S&P Global
