Iran's 1.2 Million MT February Fuel Oil Exports to be Split Between Singapore and Fujairah

As many as eight cargoes of fuel oil are said to be headed for Singapore. 

Half of Iran's estimated 1.2 million metric tonnes (mt) of fuel oil exports for February are going to end up at the world's largest bunkering port, Singapore, according to a report released Wednesday by Platts.

The report notes that Iran exported about 760,000 mt of fuel oil the month previous - it is thought that about 100,000 mt of that went to Singapore as Iranian sanctions were dropped.

The rest of Iran's February exports were said to be expected to go to the Fujairah bunker market.

The report quotes a source claiming that at least five vessels carrying 75,000 mt each are on their way to Singapore, while another source suggested there could be as many as eight vessels on the way to Singapore from Iran.

Iran's fuel oil exports surged in January, rising 81 percent from about 420,000 mt in January 2015 as a result of the lifting of sanctions.

Exports have also risen as a result of a mild winter in Iran and a rumoured decrease in storage availability for fuel oil.

Shipments from Iran still face challenges however.

As Ship & Bunker previously reported, murk around the viability of insurance coverage and bankers that are cautious about lending money to finance Iranian oil trades are said to be affecting exports.  

It was speculated that at least some of the fuel oil heading to Singapore could end up in floating storage, as some terminals were said to be still wary about accepting Iranian fuel oil cargoes.

The report noted that Singapore authorities have yet to issue clear guidelines on how Iranian oil imports should be handled. 

Singapore is expected to receive more than five million mt of fuel oil imports from other sources in March, putting even more downward pressure on prices.

A positive for the Fujairah market, which it was noted that ex-wharf parcels are currently trading at lower than normal premiums, would be that the quality of bunker fuel there should improve as higher quality Iranian product, which is relatively low in sulphur, flows to the port. 

Last month Ship & Bunker reported that Iran was cutting the price of crude charged to European countries as sanctions came off.