Fujairah to rise bunker premiums by 30% to the end of September
Bunker premiums at the world's third-largest refuelling port of Fujairah could rise by as much as 30 percent by the end of the summer as Iran and Iraq cap international sales, industry sources said on Wednesday.
The Middle East's top bunkering port is already starting to pull supplies from Indian refiners at record high prices, traders said.
The Emirates National Oil Co (ENOC) just purchased a 60,000 tonne fuel oil cargo of 380-centistoke (cst) for October loading at a premium of about $15 to the Middle East benchmark.
ENOC bought the cargo from India's Mangalore Refinery and Petrochemicals Ltd (MRPL).
"At this level, ENOC would add at least one, two dollars when they sell it," a Singapore based trader said.
"Market is tight and it is looking like it is going to start getting tighter, premiums could go up to $20."
Middle East bunker premiums, the margin traders make on selling the marine fuel, were pegged at about $16-$18 a tonne for the week ended August 21, traders said, up from about $5 towards the end of the first-quarter, traders said.
"We are already seeing more Indian fuel oil make its way out to Fujairah, and we may see some fuel oil from the West make its way here as well," a trader said.Indian refiners have sold about 800,000 tonnes of fuel oil into the Middle East since June.
IRAN SUPPLY
Iran the world's fifth-largest crude oil exporter, typically limits international sales to feed growing domestic demand for the fuel which is also used by power plants during the summer.
But state oil firm the National Iranian Oil Company (NIOC) could be looking at extending this cap beyond the summer, a source familiar with international sales said.
"We are being cautious when it comes to offering spot cargoes for the export market," the source said.
"Our first priority is to meet domestic demand, we are still waiting to hear back from our refinery planning side to find out what the requirements are in the fourth-quarter."
Iran last sold a parcel of 380-cst fuel oil in July to Fal Oil. There were no sales of the shipping grade fuel in August, the source said.
If they are not going to offer going into September and October, this market is going to stay very tight," a Middle East based marine fuels trader said. Besides limited supply flows from Iran, traders said that Iraq is also capping its international sales of fuel oil.
The flow from Iraq was prone to occasional disruptions due to ageing refinery infrastructure, traders said.
The Middle East's top bunkering port is already starting to pull supplies from Indian refiners at record high prices, traders said.
The Emirates National Oil Co (ENOC) just purchased a 60,000 tonne fuel oil cargo of 380-centistoke (cst) for October loading at a premium of about $15 to the Middle East benchmark.
ENOC bought the cargo from India's Mangalore Refinery and Petrochemicals Ltd (MRPL).
"At this level, ENOC would add at least one, two dollars when they sell it," a Singapore based trader said.
"Market is tight and it is looking like it is going to start getting tighter, premiums could go up to $20."
Middle East bunker premiums, the margin traders make on selling the marine fuel, were pegged at about $16-$18 a tonne for the week ended August 21, traders said, up from about $5 towards the end of the first-quarter, traders said.
"We are already seeing more Indian fuel oil make its way out to Fujairah, and we may see some fuel oil from the West make its way here as well," a trader said.Indian refiners have sold about 800,000 tonnes of fuel oil into the Middle East since June.
IRAN SUPPLY
Iran the world's fifth-largest crude oil exporter, typically limits international sales to feed growing domestic demand for the fuel which is also used by power plants during the summer.
But state oil firm the National Iranian Oil Company (NIOC) could be looking at extending this cap beyond the summer, a source familiar with international sales said.
"We are being cautious when it comes to offering spot cargoes for the export market," the source said.
"Our first priority is to meet domestic demand, we are still waiting to hear back from our refinery planning side to find out what the requirements are in the fourth-quarter."
Iran last sold a parcel of 380-cst fuel oil in July to Fal Oil. There were no sales of the shipping grade fuel in August, the source said.
If they are not going to offer going into September and October, this market is going to stay very tight," a Middle East based marine fuels trader said. Besides limited supply flows from Iran, traders said that Iraq is also capping its international sales of fuel oil.
The flow from Iraq was prone to occasional disruptions due to ageing refinery infrastructure, traders said.