Fujairah’s HSFO Bunker Premiums Buoyed Amid Tighter-Than-Usual Stockpiles

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  • Barge loadings delayed
  • Downstream demand healthy

As traders expect the leaner high sulfur fuel oil product availabilities to support downstream premiums at the UAE’s key bunkering hub of Fujairah for the near term, especially amid steady demand, extended queues for barge loadings tightened schedules for prompt refueling lots, reports SP Global.

HSFO bunker premiums

Longer waiting times for barges awaiting berth to reload HSFO ex-wharf cargoes led some players to prolong refueling lead times, while others reportedly chose to suspend prompt offerings for prospective forward requirements owing to the tighter-than-usual inventories, local traders said.

Meanwhile, the westbound scrubber-fitted ships rerouting around the Cape of Good Hope have been reportedly lifting substantial bunker volumes from Fujairah hub, ahead of the longer voyage ahead as shipowners shy away from the Red Sea lanes amid geopolitical tensions and security risks, bunker suppliers said.

Based on a trader’s initial estimates, inflows of Iranian barrels toward the UAE might be rather limited for May arrivals, while replenishment arrivals in April were reportedly also lower than volumes across March.

Stocks of heavy distillates around Fujairah, utilized as power generation and ship fuel, fell 3.8% on the week to a four-week low of 9.505 million barrels as of May 6, according to the latest data from the Fujairah Oil Industry Zone.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium to FO 380 CST 3.5% FOB Arab Gulf cargoes averaged $40.85/mt over May 2-9, above the $34.95/mt for all of April and $19.40/mt in March, S&P Global Commodity Insights data showed.

Fujairah’s HSFO bunker premium most recently touched a 13-month high of $46.09/mt, and was last assessed higher at $49.48/mt on March 20, 2023.

Additionally, the May HSFO term contract ex-wharf cargoes were signed at differentials between minus $2/mt and plus $5/mt to Mean of Platts Arab Gulf 180 CST HSFO assessments, with the majority of barrels concluded at differentials at the higher end of the range of about flat to plus $5/mt, compared with differentials between minus $2/mt and plus $8/mt for April-loading barrels.

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Source: SP Global