Latest News

Marine fuel supply squeeze eases as the market adjusts to prolonged Hormuz disruption

Industry sources told the APPEC industry meeting on Thursday that the market has been able to work around the earlier'supply shocks'.

In a panel at the conference, Rishi Nyati said, "We do not see any problems with sourcing bunkers today and putting them on board."

Nyati said that there is currently no shortage of marine fuel or bunkers in the major shipping hubs, as opposed to March and April. However, he added that refuelling prices have risen.

According to data from the market, as of this week outright prices for mainstay VLSFO fuel oil, in Singapore, which is the world's biggest bunkering hub?are more than 60% higher than pre-war levels.

Prices have been volatile for the last six months, after the U.S. & Israel attacked Iran late in February. Prices have risen since March, but they are now lower than the record highs.

Max Tay is Asia's heavy product trading manager at Repsol.

Tay, in a panel discussion on the same topic, said: "There are disruptions of supply out of the Strait of Hormuz. But there are alternative sources of supply we can obtain."

Tay explained that the challenge is the inability to secure blending stocks for marine fuels which meet certain specifications?for specific buyers and markets.

Tay estimates that the bunker activity in the port of Fujairah, the United Arab Emirates, which is another major ship-refuelling hub has returned to approximately 40% of its pre-war level, while bunkering at Singapore has remained steady since the start of the war.

Emarat's Nyati informed the panel that despite the tensions, some oil is still being transported through the Strait of Hormuz.

"Hormuz?is not closed. "There are between 10 and 15 transits both ways," said Nyati. He was referring to the daily transits by cargo vessels through the Omani Corridor on the southern side.

He said, "There's oil flowing."

(source: Reuters)