We are now halfway through 2021 and, while life has yet to return fully to normal, the successful rollout of vaccinations in some countries has led to a gradual reopening of their economies. That said, we must not forget that some parts of the world continue to be affected by the global pandemic and our thoughts are with those people impacted.
The pandemic has had a huge impact on commodities. The price of crude oil has held steady above $60/b in recent months, with the S&P Global Platts assessment of Dated Brent breaching $70/b in mid-May for the first time in two years.
With oil prices finding support, the focus continues to be on-demand recovery and how this will balance out with the OPEC+ grouping of producer nations output cuts now slowly easing.
There are concerns that a major rebound in oil demand — with the International Energy Agency forecasting an additional 6.5 million b/d in consumption between the first quarter and the end of the year — will outpace any supply growth from OPEC and its partners.
The projected higher output from OPEC members in the Middle East will need more ships to take crude to consumers, with the Port of Fujairah one of the world’s leading bunkering hubs, where vessels stop off on their voyages to refuel. A major development in bringing transparency to bunker sales at the port happened late in March, when it was announced that Fujairah would be reporting bunker fuel sales volumes for the first time, exclusively through S&P Global Platts.
The bunker sales data are reported monthly across six categories: 180 CST low sulfur fuel oil, 380 CST low sulfur fuel oil, 380 CST marine fuel oil, marine gasoil, low sulfur marine gasoil and lubricants. The latest bunker sales data for April indicated that bunker sales were up 7.1% on the month, with total sales rising to 679,338 cu m from 634,045 cu m in March. Low sulfur fuel oil is the most popular fuel sold at the port, with sales of 532,970 cu m in April, up from 481,213 cu m in March. High sulfur fuel oil sales are the secondhighest category of fuel sold, with 112,952 cu m in April, compared with 127,787 cu m sold in March.
Helping to provide bunker fuel to the Port of Fujairah are three independent refining units.Two of these units are largely focused on producing IMO 2020 compliant bunker fuel, with a combined capacity of over 500,000 mt/month. The third refining unit at the port produces high sulfur fuel oil, which is sought by ships with scrubbers that visit the port for bunkering.
Besides bunkering, there is also the storage of oil, crew transfer and maintenance work done on vessels that call at the port. With over 40 million barrels of refined product storage capacity and around 20 million barrels of crude oil storage capacity, the port has the largest independent oil storage capacity in the Middle East
Complementing the bunker sales data is the weekly stock reporting at the Port of Fujairah, which passed the five-year milestone at the start of this year. Stocks are reported across three categories: light distillates, middle distillates and heavy residues.
As we move into the second half of the year, the Port of Fujairah will continue to play a vital role as the leading trading and oil storage hub in the Middle East and there is now an unparalleled level of visibility in activity at the port, bringing transparency that allows market participants to make informed decisions.
Daniel Colover
daniel.colover@spglobal.com