Data and image credit: Ship & Bunker

Bunker supply tightness in Fujairah is expected to persist until at least mid-July, with limited cargo arrivals continuing to keep fuel availability constrained and premiums elevated, according to global trading firm Dan-Bunkering.

While bunker demand has seen a slight uptick amid expectations that the Strait of Hormuz could reopen, product availability remains scarce, Dan-Bunkering said in its weekly market report.

“Bunker premiums are still very high as cargoes remain very limited, with most suppliers still dry of product.

“One VLSFO cargo landed this week, the first in more than 2 months, but it's a small parcel.”

Another source told Ship & Bunker on Wednesday that supply has been very tight in recent weeks as suppliers are struggling to receive cargo due to the Iran conflict.

Only a few suppliers in Fujairah and Khor Fakkan have some cargo left, but premiums are higher due to scarcity of supply, the source added.

Disruptions to cargo flows are expected to keep bunker premiums high and supplies constrained until at least mid-July, Dan-Bunkering said.

The firm advised shipowners and operators planning to bunker in Gulf ports to allow extra lead time and secure fuel requirements well in advance, warning that available volumes may not be sufficient to meet demand if vessels currently waiting outside the region begin lifting bunkers upon their return.

Ship & Bunker had reported earlier this month that extremely low availability of VLSFO had pushed VLSFO prices to a record high in the port.

Fujairah’s VLSFO price had risen by $46/mt to a high of $1,275/mt on Friday but eased to $1,209/mt on Tuesday as crude prices dropped in the past days amid a US-Iran preliminary deal announced.

Despite the drop, Fujairah’s VLSFO remains at a premium of $554/mt over Singapore’s VLSFO and $611/mt over Rotterdam’s VLSFO on Tuesday.

This compares to Fujairah’s VLSFO trading at a much narrower premium or sometimes at parity with Singapore’s VLSFO price in April.