Marine fuel sales at Singapore jumped to a 22-month high in November, latest official data showed on Tueday, as lower prices lifted buying interest at the world’s largest bunkering hub.

November bunker sales totalled 4.37 million tonnes, climbing 3% month-on-month and up 4% year-on-year, data from Singapore’s Maritime and Port Authority showed.

The higher sales came despite lower vessel arrivals for bunkering at Singapore, which dipped dipped by 4% month-on-month at 3,299 vessel calls, although edged higher by 3% year-on-year.

Marine fuel prices fell month-on-month in November and this had incentivised some shippers to agree deals for bigger-volume stems, bunker fuel traders said.

“Lower cargo prices might have incentivised some bigger purchases for storage as inventory on the ships’ tanks,” said a bunkering manager who trades in the Singapore marine fuel market.

Total sales of low-sulphur marine fuel oil at Singapore gained 6% from the previous month to 2.75 million tonnes, even as total sales of high-sulphur marine fuel oil dipped 5% to 1.25 million tonnes in November.

“Vessels without scrubbers opportunistically increased bunker purchase volumes in the last month due to lower delivered prices,” said Ivan Mathews, head of FGE’s Asia Refining and Global Fuel Oil Service.

He added that low-sulphur marine fuel sales could extend its climb this month as prices at Singapore also appeared to be more competitive, compared to other regional ports like Zhoushan.

Bunker fuel prices for 0.5% low-sulphur fuel oil on a delivered basis have trended lower in November after upstream crude oil prices fell.

The number of tankers used to store bunker oil along the Singapore Strait has increased since the Ukrainian war broke out, and will rise further as sanctions-hit Russian supplies head for Asia. It’s possible, industry sources and analysts said.

 

An increase in liquid storage supplies along strategic waterways indicates that more supplies are available to Asia, which will help ease tight markets. At the same time, however, it could limit the recovery of spot fuel oil prices this year, weighing on Asian refining profits for this grade.

Earlier this month, the European Union announced that it may ban the import and transit of some fuel oil from Russia from August 10.

 

The number of vessels used to store bunker oil in the Singapore Strait will total 18-20 by July, compared with 14-16 in the first quarter of this year, according to oil analysis firm Kpler. I was.

HSFO stocks, estimated at about 1 million tonnes, increased in July, nearly doubling compared to January, adding to total floating fuel oil stocks, according to Kpler data.

“The likely return of the increasingly shunned Russian fuel oil to eastern Suez could lead to more floaters arriving in the Strait,” said Jane Xie, senior oil analyst at Kpler.

South of Singapore, the 70-mile (113-kilometer) long strait lies between the Straits of Malacca and the South China Sea.

 

Inquiries about floating storage capacity along the strait increased after the war between Russia and Ukraine began in February, supporting shipping rates, market sources said.

There was demand to store Russian oil and other types of oil used in blends, they added.

While Asia has yet to receive a significant influx of Russian bunker oil, some buyers remain wary of buying oil directly from Russia, so some quantities will be shipped from ships before heading east. It has been moved to another place by moving to a ship.

Common locations for blending and re-exporting Russian oil include the Middle East trading hub of Fujairah and other ship-to-ship locations in the Mediterranean and the West, such as Amsterdam-Rotterdam-Antwerp (ARA). said the source.

 

Based on Refinitiv estimates, monthly Russian fuel oil supplies to Asia rose from 510,000 tons before the invasion to an average of 627,000 tons after the invasion.

 

Evolving Trade Flows

Refinitiv vessel tracking data shows that more Russian bunker oil has flowed into Fujairah since May, and some of these barrels are likely to be re-exported.

 

Yo Yang Chong, director of Refinitiv Oil Research in Asia, said: “HSFO continues to fall as the market is flooded with homeless Russian barrels stored in unlicensed commercial warehouses. probably,” he said, adding that Russian HSFO exports to Fujairah surged in July.

 

Fujairah has received more than 2 million tonnes of fuel oil from Russia so far this year and is expected to exceed 1.7 million tonnes in 2021, according to Refinitiv data.

 

Yeo said most of these casks have yet to find their way from Fujairah to Asia as they need to be further blended.

The number of tankers used for storing fuel oil along the Singapore Strait has risen since the Ukraine war broke out and could rise further as more of Russia’s supplies hit by sanctions head to Asia, industry sources and analysts said.

A rise in floating storage supply along the strategic waterway is an indicator that more supplies are available to Asia, which will help ease tight markets. But, at the same time, it could limit a recovery in spot fuel oil prices for the year and weigh on Asian refining profits for the grade.

Earlier this month, the European Union said it may ban the import and transit of some fuel oil from Russia from Aug. 10, around six months ahead of a planned deadline. Read full story

The number of vessels used for storing fuel oil in the Singapore Strait totalled 18 to 20 by July versus 14 to 16 in the first quarter of the year, according to oil analytics firm Kpler.

Total floating fuel oil inventories have risen, led by an uptick in HSFO storage estimated at around 1 million tonnes in July, Kpler data showed, nearly doubling versus January.

“There is the potential for more floaters to arrive in the Strait as increasingly shunned Russian fuel oil will likely be backed into the East of Suez,” said Jane Xie, a senior oil analyst at Kpler.

The 113 km-long (70 mile) long strait to the south of Singapore is situated between the Strait of Malacca and the South China Sea.

 

The Russian War Impacts Trade Flow

More Russian fuel oil has been flowing into Fujairah since May, with some of these barrels likely to be re-exported, Refinitiv ship-tracking data showed.

“HSFO will continue to be depressed as the market remains awash with homeless Russian barrels stored in unsanctioned commercial storage,” said Yaw Yan Chong, director of Refinitiv Oil Research in Asia, adding that Russian HSFO exports to Fujairah surged in July.

Fujairah is expected to receive more than 2 million tonnes of fuel oil from Russia so far this year, surpassing 1.7 million tonnes in 2021, Refinitiv data showed.