Istanbul bunker prices supported by lower HSFO output
Bunker prices at the port of Istanbul have fallen by around 15pc in the past month, a far less acute decline than at some other locations in the east Mediterranean. Prices are largely being affected by regional refiners' approaches to the International Maritime Organisation (IMO) sulphur cap that comes into effect next year.
The price of high sulphur 380cst (HS380) at Istanbul fell from $438.75/t on 12 July to $374.50/t on 20 August. At the Greek port of Piraeus, the HS380 price fell from $430.50/t to $309.75/t, or 28pc, over this period, according to Argus data.
The fall is mainly attributable to lower crude prices — timely for cruise ship owners purchasing bunker fuel on the spot market during the peak summer season. But several bunker suppliers and traders said prices at Istanbul have been cushioned by a reduction in regional HSFO production.
Turkey's Tupras, traditionally one of the largest HSFO suppliers in the Mediterranean region, has reduced its output in order to increase production of bitumen, a response to margin volatility ahead of the IMO 2020 change. Refiners in Israel, Greece and Italy are also likely to have lowered HSFO production, and regional suppliers have started to clean out tanks in preparation for IMO 2020.
Argus assessed Istanbul HS380 at a $70.75/t premium to Piraeus on 16 August — the highest on records going back to 2012, and compared with a premium of just 75¢/t on 11 July. For most of 2019, Istanbul's premium over Piraeus had been in a range of $0-20/t, and it averaged $11.87/t during the first half of the year.
HS380 was last heard traded in Istanbul at $370/t and 180cst traded at $420/t, according to one supplier.
Istanbul MGO prices rise on lower Russian export
Marine gasoil (MGO) prices in Istanbul moved sharply compared with those in Piraeus in recent weeks, as some bunker suppliers faced shortages because of lower imports from Russia. The premium for MGO at Istanbul over Piraeus reached a high of $94.50/t on 16 August, and fell back to $79.25/t on 20 August, according to Argus data.
Local refineries rarely supply MGO as Turkey is net short of diesel.
Turkish bunker suppliers said MGO imports from Russia could increase in September.
The higher prices for HSFO and MGO at Istanbul do not appear to have dampened demand. Activity picked up at the end of last week after public holidays for Eid al-Adha over August 11-15. In Greece, peak cruise season typically leads to higher bunkering demand; but an uptick in sales in August could be attributed to the disparity in prices between ports in the east Med.
"In the last two weeks I have seen higher sales than in the first week of August… mainly from container [ships]," a Greek supplier said.
Tighter HSFO supply boosts prices across the Med Basin
The effect of lower HSFO supply has rippled across the Mediterranean, and helped to increase the price of bunkers at local ports over locations in northwest Europe. Argus assessed the premium for Gibraltar HS380 over Rotterdam HS380 at $41/t today, after a recent high of $41.50/t on 15 August — the highest since $45/t on 14 January.
The premium for Gibraltar over Rotterdam was just $3/t on 12 March. The increase reflects relatively tighter HSFO supply by refiners in the Mediterranean region over their peers in the Amsterdam-Rotterdam-Antwerp (ARA) trading and refining hub.
Related news posts
TUI Cruises receives methanol-ready ship
TUI Cruises receives methanol-ready ship
New York, 18 April (Argus) — Cruise ship company TUI Cruises took delivery of a methanol-ready cruise ship which will start operations at the end of June. Methanol-ready vessels allow ship owners to easily retrofit their vessels to burning methanol in the future. The 7,900t deadweight Mein Schiff 7 will operate in the North Sea, the Baltic Sea, along the European Atlantic coast and in the Mediterranean and run on marine gasoil (MGO). It was built by Finland's Meyer Turku shipyard. In January, TUI Cruises signed a memorandum of understanding with trading company Mabanaft for future supply of green methanol. Mabanaft would cover TUI's methanol needs in northern Germany, and gradually add other European locations. Grey methanol was pegged at $717/t MGO equivalent and biomethanol at $2,279/t MGOe average from 1-18 April in Amsterdam-Rotterdam-Antwerp. About 0.9 times and 2.9 times, respectively, the price of MGO, Argus assessments showed. TUI Cruises is a joint venture between the German tourism company TUI AG and US-based cruise ship company Royal Caribbean. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UAE air traffic recovery begins after storm disruptions
UAE air traffic recovery begins after storm disruptions
Singapore, 18 April (Argus) — Air traffic at Dubai International (DXB) has begun to recover after an unprecedented storm hit the country on 16 April, although flight delays are expected to continue. "DXB resumed inbound flights of international airlines operating out of terminal 1", a spokesperson for DXB operator Dubai Airports said on 18 April. But it urged travellers not to come to the terminal for outbound flights before confirming their flight status, as it said the access to the terminal is "strictly limited" to guests with confirmed departures. Prolonged flight disruptions at DXB, which was ranked the second-busiest airport in the world in 2023, according to the Airports Council International's preliminary ranking, could affect regional jet fuel demand. Dubai low-cost carrier flydubai said it has now resumed partial operations from DXB, having previously cancelled all of its flights scheduled to depart from Dubai on 16 April evening until 10am on 17 April. Select outbound flights were to operate from DXB's terminal 2 with scheduled operations resuming after 8pm on 17 April, it said, while flights from terminal 3 were due to resume after midnight. But Dubai-owned Emirates Airlines has extended the suspension on check-in for passengers departing DXB until 9am on 18 April, after having initially suspending it between 8am and midnight on 17 April. The airline said the extension was because of "continued operational challenges caused by bad weather and road conditions". Neighbouring Abu Dhabi's Zayed international airport said it is "operating smoothly", despite issuing a warning on 17 April that some flights might be delayed. By Ieva Paldaviciute Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
June deadline set for Citgo auction bids
June deadline set for Citgo auction bids
Houston, 17 April (Argus) — Bidders for Citgo's US refining assets have until 11 June to submit offers for the company's 805,000 b/d of refining capacity and associated assets, with a tentative sale hearing set for 15 July. Documents filed Tuesday in the US District Court for the District of Delaware set 11 June as the deadline for interested parties to submit final binding bids after non-binding bids were received 22 January. The court began the auction process for Citgo's parent PdV Holding (PdVH) in October, part of the process of satisfying debts owed by Venezuelan-state owned oil company PdV. The court will file a notice of a successful bid "as soon as reasonably practicable" following the 11 June deadline and selection of a successful bidder. No date has been set for the filing of objections to the sale or replies to the objections before the tentative 15 July hearing. The legal wrangling over Citgo is unlikely to conclude even if the Delaware court successfully executes the sale as 27 businesses have filed claims against Citgo amounting to more than $21bn. The scale of Citgo's operations in the US are also a challenge to any potential buyer. Few companies look ready to buy the company's three refineries, three lubricants plants and retail and midstream assets. The assets have been valued by various analysts anywhere between $6.5bn and $40bn, with a lofty valuation potentially deterring bidders. But the auction process itself has been the main cause for concern. Independent refiner PBF Energy's chief executive Matthew Lucey previously called the auction a "quagmire" , considering its ties to a complex geopolitical situation in Venezuela, saying he did not expect the sale to go anywhere in the near term. Marathon Petroleum expressed similar disdain. "We're not interested in the auction process," Marathon chief executive Michael Hennigan said on an earnings call in October . By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Idemitsu books rare US Gulf-Vancouver HVO cargo
Idemitsu books rare US Gulf-Vancouver HVO cargo
New York, 17 April (Argus) — Japanese oil company Idemitsu provisionally hired a medium range (MR) tanker to carry hydrotreated vegetable oil (HVO) from the US Gulf coast to Vancouver on 16 April, a sign of the growing HVO trade from the region into west coast North America. Idemitsu put the Stolt Sisto MR on subjects for a US Gulf coast-Vancouver voyage from 20-25 April at $2.35mn lumpsum. The fixture may be part of an agreement under which Vertex Energy supplies Idemitsu's California-based subsidiary, Idemitsu Apollo, with all of its renewable diesel production from its plant in Mobile, Alabama. The plant's exports are targeting "growing regional markets in the western United States and Canada", according to Vertex. High freight costs for US domestic shipments because of the Jones Act may be encouraging Idemitsu to focus on the Canadian market. In comparison, freight for a US-flagged MR on a New Orleans-Los Angeles voyage was equivalent to $4.34mn, nearly double the cost of a voyage to more distant Vancouver. "I think [demand from Vancouver] will keep expanding with the subsidies/grants," a shipbroker said. "There is not much production in Vancouver, just Parkland [refinery]." Canadian oil company Suncor typically books one MR vessel a month to carry HVO from the US Gulf coast to Vancouver, with two charters in October 2023 standing out as a particularly active month for the trade, according to ship fixtures compiled by Argus . But Idemitsu has been "jumping in on the action" in recent months, according to the shipbroker, provisionally hiring at least one MR tanker on the spot market in January and February before yesterday's deal. Vancouver buyers are also getting HVO from Asia-Pacific suppliers, and countries like South Korea could become increasingly competitive in the renewable trade overall as they ramp up their sustainable aviation fuel (SAF) and HVO production in the coming years. Vancouver imported around 29,500 b/d of HVO in January 2024, including 16,612 b/d from the US, 7,548 b/d from South Korea, and 5,351 b/d from Taiwan, according to Kpler data. By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more