The rise of the Middle East as a major trading and refining hub, at the epicentre of energy demand, quickly marked the region out as the fulcrum in rapidly evolving global energy trade flows. The ambition that has underpinned the expansion of Fujairah as a significant logistics hub has helped reshape those energy flows, even as the trade flows were reshaping Fujairah.
The Port of Fujairah today hosts key market makers while the presence of tanks for blending and storage, pipelines, deep water port facilities, the presence of refining facilities that can produce IMO 2020 compliant fuel and its geographic position at the crossroads of international trade mean it has emerged as a vibrant marketplace.
For S&P Global Platts, such credentials are the hallmark of benchmark pricing services – the provision of robust, independent price reporting driven by transparent market-derived price information – and the drive towards lower sulfur fuel oils as part of the IMO’s 2020 changes will only consolidate that position.
Long an important cog in the provision of bunker fuels to the marine world, S&P Global Platts isn’t new to the Middle East – its first Kuwait-based bunker fuel assessments were launched in 1986, with Khor Fakkan assessments launching in 1989, followed by Fujairah as far back as 1994. As refining in the region has intensified and improved, fuel oil assessments were joined by jet fuel and gasoil assessments, along with propane and butane in 1998, with naphtha and gasoline completing an impressive pricing suite by 2008.
Now, the start of the new decade has brought with it a cut in sulfur levels to 0.5% for marine fuels – and, once again, Platts and the Port of Fujairah are at the forefront, with the launching of a suite of Marine Fuel 0.5% assessments reflecting the value of IMO 2020 complaint fuel at the port.
When you consider that marine fuels contribute 6% of total global oil demand, you realize the impact this change is having on the entire oil complex as around 3.2 million barrels a day of barrels of heavy, high sulfur residual fuel demand has had to be replaced by lower sulphur fuel that is compliant with the new IMO 2020 regulations.
Platts has a full suite of Marine Fuel maximum 0.5% sulfur assessments in Fujairah, covering the various ways the IMO-compliant fuel is sold. The first assessment is a cargo assessment which reflects the largest parcels the fuel trades in, often before it is exported to further afield.
Platts also has bunker assessments at the Port of Fujairah that it launched in July 2019. The first is for ex-wharf bunkers which are parcels sold onto bunker barges and the second assessment at the port is for delivered bunkers. In addition to the physical cargo and bunker assessments, Platts in May 2019 launched assessments for financially settled derivative contracts at the port which settle against the average of the physical cargo assessment.
Platts in October 2016 launched independent price assessments on an FOB Fujairah basis for cargoes of 95 RON gasoline, gasoil, HSFO 380 CST and kerosene. Most recently in September 2020 Platts launched 95 RON gasoline cargo and naphtha cargo assessments on an FOB Fujairah basis.
S&P Global Platts partnership with the Port of Fujairah to publish the Fujairah oil inventory data gives unparalleled transparency over the activity in the port.
As of Monday, November 22 total oil product stocks in Fujairah stood at 16.256 million barrels falling by 4.040 million barrels week on week. Overall product stocks fell by 19.9% with draws across light distillates, middle distillates and heavy residues. Stocks of heavy residues fell by 15.8%, falling by 1.716 million barrels on the week to stand at 9.165 million barrels. Heavy residues are the single largest category of stocks with light distillate stocks second, standing at 4.269 million barrels.