Bunker suppliers in Singapore have seen a jump in inquiries this week following the diplomatic crisis in the Middle East, with some estimating as much as 25,000 mt-30,000 mt of marine fuel demand being displaced from Fujairah to Singapore so far.
After Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed diplomatic ties with Qatar earlier this week, the key regional bunkering port of Fujairah said that it would not allow vessels flying the flag of Qatar or vessels going to or coming from Qatar to call at the port.
Fujairah is the only multi-purpose port on the eastern seaboard of the UAE and is located approximately 70 nautical miles from the Strait of Hormuz.
Industry estimates put marine fuel sales in Fujairah at around 12 million-15 million mt in 2016. The port authorities do not provide any official data.
Platts Fujairah Oil Inventory Storage Data:
S&P Global Platts is exclusively publishing weekly oil inventory data for the Fujairah Oil Industry Zone, including an aggregate breakdown of heavy distillates and residues, middle distillates, and light distillates. The data is now freely available to access via the Platts Fujairah data platform
“The position [in the Middle East] seems to be more serious than we initially anticipated and we have seen huge volumes move to Singapore for sure,” a bunker supplier in Fujairah said.
More volatility predicted:
A Singapore bunker supplier, who also serves the Middle East, expects the situation to become “more volatile” in the coming days, adding that “a massive switch of volumes [to Singapore] is bound to happen.”
The ports at which vessels would bunker would depend on the routes they take but Singapore is the most likely candidate to receive the overflow of volumes, said another Singapore-based bunker supplier.
Singapore prepares to meet demands:
“Singapore is the major bunkering hub and most shipping lines tend to play the arbitrage between Singapore and Fujairah,” he said. “So, if it’s not Fujairah, it’ll most likely be Singapore.”
A demand shift from Fujairah bodes well for the bunker market in Singapore, the world’s largest bunkering port.
Although the city-port’s April bunker fuel sales rose 3.5% from a year earlier to 4.25 million mt, vessel arrivals for bunkering fell 4% year on year to 3,495 in April, and down 2.6% from 3,589 in March, data from the Maritime and Port Authority of Singapore in May showed.
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