Oil products inventories at the UAE’s Port of Fujairah rose 3.8% to a five-week high in the week ended June 23, as fuel oils used for shipping and power generation surged 22%, according to Fujairah Oil Industry Zone data published June 25.
Total inventories climbed to 19.12 million barrels, the highest since May 19 and marking the third consecutive weekly increase. Fuel oils categorized as heavy distillates jumped to 10.338 million barrels, also a five-week high. Middle distillates, including jet fuel and diesel, climbed 8% to 2.044 million barrels while light distillates such as gasoline and naphtha dropped 17% to 6.738 million barrels, a three-month low.
Middle distillates have jumped just over three times from the record low of only 652,000 barrels on June 2. Imports this month are averaging 116,000 b/d, the most since May 2024 and dominated by diesel and gasoil, according to Kpler shipping data.
Jet fuel demand for the region has slumped 13% since the Iran-Israel conflict began on June 13, and any recovery, if a ceasefire holds, will be gradual, according to S&P Global Commodity Insights estimates.
Ship fuel demand is lagging supplies, pushing down delivered premiums, and traders said they expect more of the same in the next few weeks. Even power demand, which usually peaks in summer for air conditioning, has not been out of the ordinary, traders said.
For high-sulfur fuel oil, the Platts-assessed Fujairah delivered 380 CST HSFO bunker premium to the 380 CST 3.5%S FOB Arab Gulf fuel oil cargoes is averaging $2.40/mt this month, down from $14.35/mt in May, according to Platts data.
For low-sulfur fuel oil, traders expect more replenishment supplies in the next few weeks, keeping a lid on any price gains. Platts assessed the Fujairah-delivered 0.5%S marine fuel bunker premium over the benchmark FOB Singapore marine fuel 0.5% sulfur cargo value at an average $4.62/mt so far in June, down from $6.42/mt in May.
Total stocks are up 23% since the end of 2024, with heavy distillates up the most at 38% followed by light distillates up 11% and middle distillates up 3.9%, according to the data compiled by Platts since 2017.
Source: Platts