Lead times of over 10 recommended in Singapore. Image Credit: MPA

• Sources recommend lead times over 10 days in Singapore
• March Singapore fuel oil imports expected to be up by 13%
• Russian fuel oil exports to Singapore set to hit 11-month high
• Singapore unlikely to run out of bunker fuel at least in the near term
• Availability tightens in Japan
• Supply is stable in Hong Kong and China

Securing prompt bunker stems in Singapore, the world’s largest marine fuels hub, remains difficult as the Middle East conflict tightens fuel oil flows.

Lead times of over 10 days are generally recommended to secure bunker stems, most sources told Ship & Bunker in the past few days, when asked about the current market conditions.

Singapore

Prompt availability of bunker grades remains tight in Singapore. 

Lead times ranging from 8-14 days are generally recommended for VLSFO and HSFO, a source told Ship & Bunker on Monday.

LSMGO lead times can be comparatively longer as supply is relatively tighter compared to the other two grades, the source added.

“Singapore, we recommend floating inquiries asap currently, as lead times can be around 2 weeks out, a trader said.

“However, it changes day-by-day in these current market conditions.”

Some suppliers are only offering on a firm enquiry basis and can supply with shorter lead times, but they are generally priced higher compared to deliveries further out, a local trader said.

Barge loading delays and port congestion have also been reported, while spot demand remains strong, another source said.

A key question has been whether Singapore could run out of bunker fuel at some point, but sources say that appears unlikely at least in the near term. 

Sources told Ship & Bunker that fuel oil stocks in Singapore remain healthy, with steady imports helping to keep supply stable.

Middle East Impact on VLSFO Prices

Image and data credit: Ship & Bunker

Singapore’s VLSFO price has climbed significantly since the war broke out in the Middle East.

According to Ship & Bunker data, Singapore’s VLSFO price rose sharply from $521.5/mt on February 27 - a day before US and Israeli strikes on Iran - to a peak of $1,120.5/mt on March 13.

Prices have since eased, falling to $838.5/mt on March 26 amid speculation that the US and Iran may enter talks to end the conflict.

Iranian strikes on Middle East oil infrastructure and attacks on vessels passing the Strait of Hormuz have largely driven the underlying crude values.

Iran continues to maintain an aggressive posture in the Hormuz, with reports that only approved or friendly vessels are being allowed passage.

While these attacks on oil infrastructure and vessels appear to have eased in recent days, the market continues to be volatile.

Imports from Russia and Brazil Offset Hormuz Supply Loss

Singapore’s fuel oil imports from the Middle East are increasingly being displaced by flows from Russia and Brazil, according to energy cargo tracker Vortexa.

Earlier this month, the US issued a 30-day waiver permitting purchases of previously sanctioned Russian oil and petroleum products.

“We are expecting a 13% m-o-m increase in Singapore residual fuel oil imports in March, driven by higher inflows from Russia and Brazil,” Xavier Tang, senior market analyst at Vortexa, told Ship & Bunker on Wednesday, when asked how the market is coping up with the lack of imports from the Middle East.

“Singapore's residual fuel oil imports from Russia are set to hit an 11-month high of around 270kbd and hit a 10-year seasonal high in March.”

“Similarly, imports from Brazil are set to reach a 1-year high of 130kbd."

“The increase in imports from Russia and Brazil has offset the reduced flows via the Strait of Hormuz, especially from Kuwait, as oil tanker transits (Handysize and above) have plunged to single digits, down from 40-45 transits in January.”

Higher fuel oil imports could potentially support bunker supply availability in Singapore. 

Other Regional Ports

Supply conditions remain mixed across other regional ports in Asia.

In Malaysia, VLSFO supply is relatively better compared to LSMGO.

Bunker fuel availability is getting tighter in Japan as refineries focus to ramp up output for domestic refined product supply, a local trader told Ship & Bunker.

Availability is holding better in Hong Kong.

No issues on bunker supply or availability in Hong Kong at the moment, a trader said.

Prompt availability remains tight in South Korean ports, with lead times of about five days generally recommended for VLSFO and LSMGO, a local source said.

However, demand has reportedly been down in South Korea.