Fujairah, as one of the key fuel hubs in the Middle East, has witnessed a significant expansion of the Hi5 price gap between VLSFO (low sulfur fuel oil) and HSFO (high sulfur fuel oil) this month. According to daily average data, this gap has risen from $201 per ton on September 1 to $285 per ton on Thursday. This gap reached its highest point of $307 per ton on September 20, which has been unprecedented since July 1.
Increase in VLSFO Prices in Fujairah
The price of VLSFO in Fujairah has risen by $163 to $1,006 per ton this month, while the price of HSFO has only increased by $79 to $721 per ton. This price increase has caused the price gap in Fujairah to be $121 per ton higher than in Singapore and $145 per ton higher than in Zhoushan. The widening of this gap helps scrubber-equipped vessels save on fuel costs.
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Decline in Fuel Imports to Fujairah
According to data from cargo tracking company Vortexa, fuel imports to Fujairah have sharply declined this year. These imports fell from 305,000 barrels per day in January and 218,000 barrels per day in February to 14,000 barrels per day in March, reaching zero in April. In August, the average imports were only 30,000 barrels per day. However, imports in September have increased to 126,000 barrels per day, which is still less than half of January's level.
Currently, 80% of fuel imports in September are allocated to HSFO and 20% to VLSFO. Vortexa's data indicates that this is the first time VLSFO has been imported to Fujairah since February, with no VLSFO arriving at this port from March to August.
Recent imports have led to an increase in fuel stocks in Fujairah. Fuel stocks in the week ending September 21 reached 5.60 million barrels, nearly double the amount of 2.84 million barrels the week before. However, these stocks remain significantly lower than the 10 million barrels recorded in January.
Despite the increase in fuel stocks, the price of VLSFO in Fujairah has not decreased. This price reached $1,014 per ton on September 20, and the price gap has remained above $280 per ton since then. The supply of all major fuel grades in Fujairah remains "very limited," and stocks at nearby ports such as Khor Fakkan are also constrained due to international tensions in the Strait of Hormuz.
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