Security tensions could compound a gasoline glut in the Mideast Gulf this week, traders and port operators said, if loading delays and reduced shipping activity push up inventories at major regional export hubs.
At least 39 tankers carrying gasoline are idled in the region, according to ship tracking service Kpler, and traders said some cargoes slated for prompt loading may be deferred or temporarily diverted into storage.
Most gasoline exports from the region typically head to destinations that do not require transit through the strait of Hormuz, but shipping sources said shipowners are increasingly avoiding the Mideast Gulf entirely after at least three vessels were hit by explosive projectiles near the strait at the weekend.
The delayed loadings come as the region is oversupplied, with light-distillate stocks in Fujairah rising for the past three weeks.
"The region was structurally oversupplied even before the latest conflict" said a market participant. "Now you have delayed loadings, fewer ships willing to come in, and barrels potentially backing up into storage."
Fujairah is the UAE's largest gasoline blending and export hub, which typically exports at least 35pc of all Mideast Gulf gasoline. At least two key terminals at the port suspended operations temporarily after debris fell nearby in the early hours of 2 March. The Jebel Ali port suspended operations on 1 March after debris sparked a fire.
Storage concerns could intensify as onshore tanks fill, but costs have not yet reflected this.
"Most companies have long-term lease agreements for storage in Fujairah, so costs remain the same and are difficult to renegotiate," said a port operator. "Terminals such as FOT and Vopak operate on a term basis, not on spot. Spot storage is available, but prices could be high and limited."
Gasoline is more expensive to store than other refined products because of its volatile nature and weak regional demand, the source said.
Drone-related incidents at regional refineries in Saudi Arabia and Kuwait have not affected supply. On the demand side, regional gasoline consumption may soften in the short term as mobility slows because of the conflict. In Dubai, authorities have encouraged remote working and virtual schooling until midweek.
The Argus MEBOB crack — which tracks 92 Ron oxygenated gasoline cargoes exported from the Mideast Gulf — rose to $9.05/bl on 2 March, from $8.33/bl on February 27. The 92 Ron Mideast Gulf gasoline premium jumped to $4.40/bl from $2.80/bl in the same time.
The Gulf gasoline complex had already been pressured by steady inflows from Europe, with arbitrage cargoes from northwest Europe to Saudi Arabia rising in the past two months to add to regional supply. This trade could become unviable if freight rates climb or if security risks push up war-risk premiums. At the same time, recent gasoline flows from the Middle East towards Singapore and Indonesia could ease if disruptions persist.
