Fujairah Port
A surge in bunker fuel prices in Fujairah threatens to shift demand
Fueling operations at Fujairah, a major bunkering hub in the UAE, have slowed after the US-Iran conflict disrupted fuel shipments in the region, leading to higher prices and the potential diversion of demand to other ports, including Singapore.
Transit through the Strait of Hormuz between Iran and Oman, which carries about a fifth of the world's oil consumption as well as significant quantities of liquefied natural gas, has almost completely ceased after several ships in the area were attacked.
While bunkering operations continue at the port, market sources in Dubai said sales have largely stopped after marine fuel prices jumped on Monday amid concerns about continued supply disruptions, according to Reuters.
Fujairah is located on the UAE's east coast in the Gulf of Oman, near the entrance to the Strait of Hormuz.
Sources said that prices for low-sulfur marine fuel at the port have risen to premiums of more than $30 per ton above Singapore fuel oil prices, which ranged between $10 and $15 last week, while high-sulfur fuel prices have moved into premium territory after previously being sold at a discount.
With consumption slowing in Fujairah, traders expect demand to shift to other hubs in Asia, Rotterdam, the Mediterranean, and India if tankers avoid the Middle East or remain stranded in the Gulf.
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