Bunker fuel sales at Fujairah, the world’s third-biggest bunkering hub, gained 2.7% month on month to 669,992 cu m in July, but were down 2.9% year on year, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Commodity Insights Aug. 16, reports SP Global.
Ceased terminal operation
Refueling operations for bunker barges were mostly hampered between late-July and early-August as upstream cargo suppliers ceased terminal operations, thus limiting product availabilities for downstream bunker deliveries, sources said.
“We had seen a lot of low sulfur fuel oil inquiries during the last week of July through the first week of August, but couldn’t take in due to uncertainties on loading [schedules],” a Fujairah-based bunker supplier said.
Sales of IMO 2020 compliant LSFO grades totaled 518,636 cu m in July, up 7.3% month on month but down 3.3% year on year, the FOIZ data showed, despite the weather-induced supply disruptions.
Demand for fuel
The Platts Fujairah-delivered marine fuel 0.5%S bunker premium to benchmark FOB Singapore Marine Fuel 0.5%S cargo assessments averaged $102.48/mt in July compared with $93.18/mt in June, according to S&P Global data. It has risen further this month to average $118.30/mt over the Aug. 1-15 period.
High sulfur fuel oil bunker sales at Fujairah slumped to 112,223 cu m in July, down 15.4% month on month — the largest monthly fall since December 2021 — and also down 6.3% year on year, the FOIZ data showed.
“Demand for both grades [of HSFO and LSFO] are actually good [if not] for the weather [events] during the last week of July,” a second bunker supplier said.
Market participants mostly attributed the lackluster performance of HSFO bunker sales to substantial losses in demand amid the operational bottlenecks during late-July, as some suppliers received “more inquiries and larger requirements” than in June.
“There were plenty of HSFO cargoes and barging schedules were not tight either,” the second bunker supplier added.
Sales of low sulfur marine gasoil with a sulfur content of 0.1% totaled 33,237 cu m in July, a 11.1% gain on the month and 18.1% higher on year, the FOIZ data showed.
Tepid outlook for August sales
Most bunker suppliers have been cautious about accepting fresh inquiries during the first half of August due to the mounting backlog of orders amid the recent loading disruptions, traders in Fujairah said.
“There was little clarity on loadings and there were backlogs everywhere,” a third bunker supplier said.
The bunker supplier added that intermittent weather warnings still ongoing at the port of Fujairah as of Aug. 16 also led some buyers to retract inquiries amid concerns over supply disruptions.
The UAE’s eastern coast witnessed rain and sandstorms in the last few days, amid weather warnings of poor visibility.
The issues at Fujairah prompted Abu Dhabi National Oil Co to divert lifting of Murban crude from the port to Jebel Dhanna Terminal in the emirate of Abu Dhabi.
“ADNOC Onshore is completing a rigorous inspection of its Fujairah Main Oil Terminal facility as it works to safely bring its operations back online,” it said Aug. 5. “The company has implemented its robust business continuity plans and is implementing all avenues in order to ensure the uninterrupted export of Murban, including the gradual reinstatement of Fujairah Terminal operations, the utilization of alternative loading options within Fujairah, and through the use of Jebel Dhanna Terminal.”
Although a terminal belonging to one of the local refiners was reportedly operating at almost full capacity since the week ended Aug. 12, overall terminal operations at the port of Fujairah are currently estimated between 75-80% of total capacity, according to market sources Aug. 16.
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Source: SP Global
