Demand for bunker fuel fell across major Middle Eastern ports in April, as the war created uncertainty over ship movements and restricted fuel supplies, although activity in some Omani ports gradually rebounded, five market participants, including traders and suppliers, told Platts, part of S&P Global Energy, on May 6.
Demand for bunkering in Fujairah and Dubai was weak throughout April as ship traffic through the Strait of Hormuz slowed amid bearish market expectations due to the war, two traders covering Middle East markets said on May 6.
“We did not see any demand in April at the ports of Fujairah and Jebel Ali,” a Dubai-based trader said on May 6. “The ships currently plying the Strait of Hormuz, as well as those heading to Qatar and Kuwait, are consuming bunker fuel, but apart from that, we are not seeing much ship movement and inquiries are not strong either.”
Total bunkering and ship-to-ship operations at Fujairah and Jebel Ali rose to 470 in April from 140 in March, according to data from S&P Global Commodities at Sea (opens in a new tab).
“Initially, after the start of the conflict, we thought the market was stabilizing. However, with Brent crude oil prices fluctuating, the market became uncertain. All demand shifted towards ports in Africa, India (opens in a new tab) and Colombo (opens in a new tab). Buyers in these regions initially panicked and consumed more bunker fuel at South Asia and Pacific ports (opens in a new tab),” the trader added.
Another Dubai-based trader said on May 6: “April was bad, no supplies and very less demand. Inquiries are one to two every day. I am dry all April.”
Oil product inventories at Fujairah (opens in a new tab) in the United Arab Emirates fell 6.9% to 6.501 million barrels in the week ending May 4, reaching a record low for the fifth week in a row and continuing to decline since the start of the Middle East war, according to Fujairah Oil Industry Zone data published on May 6.
Platts assessed the average price of 0.5%S marine fuel oil delivered in Fujairah for April at $768.95 per metric ton, down $154.73 per metric ton month-on-month.
Oman is witnessing mixed trends
Demand for bunkering in Salalah was weak in April, constrained by fuel shortages and allocation-based loading programmes, a Salalah-based trader said on May 6.
“Price factors affected the market a lot,” a Salalah supplier said on May 6. “We sold about 1,000 metric tons in April, compared to 100 metric tons in March. Refineries were supplying cargo on a quota basis, and fuel suppliers often received only part of the quantities ordered. If we booked three loads, we might only get one.”
However, another Oman-based supplier said conditions improved in April, supported by strong ship activity and improved regional enquiries.
“Market conditions in Oman during April showed improvement, with increased demand due to vessel activity and improved inquiries from regional operators. “Our vessel volumes rose to 2,986 metric tons in April from 2,160 metric tons in March, with some regional demand shifting toward Omani ports,” the Oman-based supplier said on May 6.
The bunkering sector in the Sultanate of Oman witnessed a merger, as O Bunkering and Marafi Services completed the merger to form a single integrated entity under the name O Bunkering.
“This merger between O Bunkering and Marafi represents a qualitative leap in the institutional maturity of Omani companies operating in the logistics sector,” said Saeed Al Maawali, Oman’s Minister of Transport, Communications and Information Technology, in a statement received from Al Supplier on May 6.
The supplier added: “The joint structure will improve operational flexibility and enhance service reliability across Omani ports. The merger brings together complementary capabilities in the marine fuel supply sector, creating a more integrated and efficient operation.”
Iraq’s supply is exposed to uncertainty regarding transit
In Iraq, fueling operations remained under pressure during April amid uncertainty surrounding transit through the Strait of Hormuz.
“April has proven to be a difficult month for bunkering operations through Iraqi ports,” Vinayak Kharmal, trader and chief operating officer of Sea Crown Marine Services DMCC, told Platts on May 6. “We did about 7,000 metric tons in April, sharply down from 15,000 metric tons in March. The decline was not due to a lack of demand, but rather due to the inability of ships to transit and plan voyages effectively.”
“There is still a common concern across the market – even if we take the bunkers, where will we go next? The demand is there, but execution remains on hold until normal transport resumes.”
Platts assessed the average 0.5%S marine fuel delivered at Basra for April at $999.28 per metric ton, a decrease of $42.03 per metric ton month over month.
source: Platts
