• Offer validities drop amid volatility
• European suppliers avoid Russian vessels
• Tightening availability in ARA and Gibraltar Strait
Due to the volatile crude prices, offer validities have come down to a few minutes in the ARA hub. And the number of credit days has come down to 21, 15, and even 7 days, sources say.
Fuel availability is tight across all grades in the ARA. Recommended lead times are around 3-5 days. While some suppliers can offer prompt supplies of VLSFO and LSMGO, HSFO is more difficult to find.
ARA’s independently held fuel stocks grew by 7% last week but were still below their five-year average position. Gasoil stocks increased by 5% while remaining close to multi-year lows, according to Insights Global.
Availability of HSFO is tighter in Hamburg compared to VLSFO and LSMGO. HSFO mostly comes from the Schwedt refinery near Hamburg, the refinery gets its crude supplies via pipeline from Russia, sources say. The Schwedt refinery is partly owned by Russian oil company Rosneft, which is now shunned by several oil majors and bunker suppliers.
Recommended lead times in Hamburg for VLSFO and LSMGO are around 3-5 days.
UK has announced that it will phase out imports of Russian oil and oil products by the end of this year.
Several other European countries are heavily reliant on Russian oil and gas, making them reluctant to ban imports altogether. But the European Commission outlined a roadmap to reduce gas imports from Russia by two-thirds over the next year. EU countries imported 45% of their gas from Russia last year, according to the International Energy Agency.
Shell announced it will stop buying Russian crude oil amid a backlash against its purchase of discounted Russian Urals crude. The decision will affect production at some of its refineries, it said in a statement.
Bunker fuel availability in Gibraltar is tight across all grades, suppliers are seen avoiding offers for larger stems. Recommended lead times are around 3-6 days across all grades.
Bunker prices are “super volatile” in Gibraltar now, with suppliers not guaranteeing any prices upfront, and prices being subject to reconfirmation during fixtures, sources say.
In Gibraltar, port congestion mounted to 14 vessels on Wednesday, from 10 in the past day, says port agent MH Bland. Suppliers brace for bad weather that is forecast to hit next week between Monday and Friday. This could trigger suspensions and delay bunker deliveries.
In Piraeus, prompt bunker deliveries are reported tight. “It is a matter of barge availability rather than product avails,” sources say.
Recommended lead times in Piraeus are around 5-7 days across all grades, while a few suppliers can offer limited prompt deliveries.
Most of the bunker suppliers across Europe are seen avoiding bunkering of Russian vessels or dealing with Russian companies due to multiple risk factors such as counterparty, legal and reputational risks.
In Istanbul, demand has slowed slightly due to the ongoing war in Ukraine and altered vessel movements in the Black Sea, sources say. Availability of VLSFO and LSMGO is good, suppliers can offer prompt deliveries.
Suppliers in Istanbul can only offer bunker fuels to Russian vessels or companies against cash in advance to limit counterparty risk, sources say.
In Djibouti, bunker availability is tight across all grades. Recommended lead times have increased to 8-9 days.
Source: ENGINE (https://engine.online/)