Fujairah’s LSMGO premium over Singapore widens by around $180/mt since September

Fujairah's LSMGO premium over Singapore has widened by approximately $180 per metric ton since September, according to recent data. The price difference reached a high of around $460 per metric ton on October 19th. The monthly average LSMGO price in October at Fujairah hit $1,720 per metric ton, the highest level since November 2021. However, supplies of LSMGO and HSFO at the UAE port are still limited, and vessel traffic through the Strait of Hormuz remains disrupted due to US-Iran tensions, a regional source reported.

Fujairah's fuel oil stocks were 9% lower in October compared to September, with middle distillate stocks decreasing by 27,000 barrels to 2.40 million barrels. A market source cautioned that Fujairah is susceptible to sudden changes in fuel availability due to reduced barge capacity, despite relatively stable demand amid regional tensions and vessel attacks.

MGO prices at Fujairah are particularly vulnerable to a global diesel shortage, with Asian imports of light and middle distillates remaining below pre-war levels in October. In addition, Middle Eastern refined-product supplies are also constrained. Fujairah's VLSFO price traded at a discount to Singapore's by up to around $20 per metric ton from October 27th to November 2nd, as fuel oil inventories tightened and supply flows fell.

Singapore's price rose to around $1,000 per metric ton on October 30th. Last week, VLSFO lead times at the port started at around 13 days, with some suppliers suggesting more than three weeks. Fujairah's VLSFO price recovered by approximately $20 per metric ton, while Singapore's price dropped by a similar amount around November 3rd.

Currently, Fujairah's VLSFO price trades around $20 per metric ton higher than Singapore's, up from around $50 per metric ton on September 1st. VLSFO availability at Fujairah has improved, according to a regional source.