Oil product inventories at the UAE’s Port of Fujairah fell by 13% in the week ending May 26, reaching a four-month low of 17.894 million barrels. All three major product categories—middle, light, and heavy distillates—saw notable declines. Market activity and exports remained dynamic, especially in the bunker fuel segment, where competitive pricing and supplier strategies shaped trends in high- and low-sulfur marine fuel sales.
Middle Distillates Hit Record Low, All Inventory Categories Decline
Fujairah’s middle distillate stocks, which include diesel and jet fuel, plunged by 22% to a record low of 1.006 million barrels, the lowest since data reporting began in 2017. Light distillates like gasoline and naphtha dropped by 12% to 7.293 million barrels, a two-month low, while heavy distillates used in power and marine fuel fell by 13% to 9.595 million barrels, the lowest in two weeks.
Despite inventory declines, exports remained robust, with gasoil and diesel shipments averaging 114,000 b/d, and jet fuel notably heading to France for the first time since 2022. Fuel oil exports averaged 281,000 b/d, primarily to Singapore, South Korea, and Iraq.
Bunker Premiums Tumble on High Supply and Seller Competition
The high-sulfur fuel oil (HSFO) bunker premium dropped to a 16-month low of $6.44/mt on May 23, before slightly rebounding to $7.65/mt by May 27. The monthly average in May stood at $15.86/mt, down significantly from $29.55/mt in April.
This steep decline was driven by abundant HSFO supplies and strong seller competition, as suppliers attempted to reduce cargoes before anticipated summer tightening. Neighboring hubs like Khor Fakkan also contributed to the competitive pricing environment.
Low-Sulfur Fuel Oil Sales Accelerate Ahead of Summer Transition
Low-sulfur fuel oil (LSFO) suppliers were also proactive, seeking to clear inventories before the end of May. The Fujairah LSFO bunker premium over the Singapore benchmark averaged $6.46/mt in May, down from $9.22/mt in April.
The market was described as “heavily backwardated,” prompting sellers to offload fuel quickly. With expectations of tightening HSFO supply in the coming summer months, suppliers are positioning themselves for potential shifts in demand and pricing structures.
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Source: S&P GLOBAL
