The summer months often see a slowdown in activity for both humans and industry as temperatures rise. As activity slows, people look to get away on their summer holidays. This year however the summer came and went with the global pandemic continuing to impact movement as travel restrictions persisted. These restrictions have been implemented by governments as a method to prevent the spreading of the coronavirus.
The restrictions have in turn impacted demand for fuels, with jet fuel, gasoline and diesel all seeing their demand eroded. International commercial jet travel has fallen by around 50% at the latest estimates, while optimism that a second wave of infections could be prevented has ebbed, as lockdowns have returned, impacting economic sentiment.
This has all had an impact on the oil markets, however Fujairah, the Middle East’s oil trading hub has served its role to the market through this year without issue. Indeed the year has seen a rise in demand from market participants to store refined products in the port, as they wait for a return in demand for various fuels. A number of fresh record highs in the weekly stock data for refined oil products stored in Fujairah which began in January 2017, were seen around the middle of this year.
Overall Fujairah has over 40 million barrels of refined product storage capacity and around 20 million barrels of crude oil storage capacity it has seen strong demand in recent months for available storage space. June this year saw the highest recorded combined stock levels across light distillates, middle distillates and heavy residues with a record 30.710 million barrels recorded in storage on June 1 this year. This breached the previous record high level of 30.262 million barrels seen on May 18 this year, which was the first time the stocks had been recorded above 30 million barrels.
barrels of refined product storage
Oil storage levels in Fujairah moved down from their record highs seen at the middle of the year as an increase in demand from out of storage was seen due to refineries across the globe reducing their operating rates.
Typically the most stored product in Fujairah is residual fuel, reflecting the role that Fujairah plays as the leading bunkering port in the Middle East. The port has two independent refineries able to produce over 500,000 mt of IMO 2020 compliant bunker fuel a month. In line with the rise in combined product stocks in Fujairah was the rise in residual fuel stocks at the port which also hit fresh record highs around the middle of this year. June 8 saw a record 17.168 million barrels of residual fuel held in tank in Fujairah, the first time the stocks have been recorded above 17 million barrels.
Oil storage levels in Fujairah moved down from their record highs seen at the middle of the year as an increase in demand from out of storage was seen due to refineries across the globe reducing their operating rates. September saw combined stock levels average 22.235 million barrels, a cut of 7.772 million barrels from June’s average.
Overall going into the cooler months focus will start to turn to next year and hopes that the global economy will see a recovery. With these hopes, we can also be sure that Port of Fujairah will continue to serve the markets with efficient oil storage facilities and to provide vessels with the bunkers they need as it fulfills its role as one of the busiest bunkering ports in the world.
