Fujairah Fuel Oil Inventories Drawn 29% in August
Key Takeaways
- •Fujairah's average fuel oil inventories were 29% lower in August than in July, dropping below 4 million barrels and reversing two months of increases.
- •Fuel oil imports into Fujairah fell to about 30,000 b/d in August while exports surged by 138,000 b/d to 306,000 b/d, turning the port into a net exporter.
- •Saudi Arabia and Bahrain supplied 64% and 35% of Fujairah's fuel oil imports respectively, while Singapore took 48% of exports, followed by China at 26% and the US at 13%.
- •Fujairah's middle distillate inventories rose 12% above July levels on average.
- •Renewed US-Iran tensions around the Strait of Hormuz continue to weigh on bunker fuel availability, with VLSFO, LSMGO, and HSFO supply remaining tight.
Fuel oil inventories at the UAE's Port of Fujairah averaged 29% lower in August than in July, according to data from the Fujairah Oil Industry Zone (FOIZ) and S&P Global. Fujairah, located just outside the Strait of Hormuz on the UAE's east coast, is one of the world's largest bunkering ports and a key storage and supply hub for shipping fuel in the Middle East, making its stock levels a closely watched indicator of regional marine fuel market conditions.
Month-on-month changes in average Fujairah stocks from July to August were as follows:
- Heavy distillate and residual stocks fell by 1.61 million bbls to 3.93 million bbls.
- Middle distillate stocks rose by 165,000 bbls to 1.54 million bbls.
The decline brought fuel oil inventories at the Port of Fujairah below 4 million bbls, reversing a trend of two consecutive months of increases.
Cargo tracker Vortexa data show that fuel oil imports into Fujairah dropped to around 30,000 b/d in August, down from 51,000 b/d in July. Over the same period, exports surged by 138,000 b/d to 306,000 b/d, turning Fujairah into a net exporter and contributing to the inventory drawdown. High-sulphur fuel oil remains in demand as bunker fuel for ships fitted with exhaust gas cleaning systems, or scrubbers, which allow vessels to burn cheaper high-sulphur grades within IMO emissions rules.
Saudi Arabia (64%) and Bahrain (35%) accounted for the bulk of Fujairah's fuel oil imports in August. Singapore (48%) was the largest destination for exports, followed by China (26%) and the US (13%).
Meanwhile, Fujairah's middle distillate inventories increased 12% above July levels on average.
Renewed US-Iran tensions around the Strait of Hormuz continue to weigh on bunker fuel availability in Fujairah. VLSFO and LSMGO supply remains tight and largely unchanged from last week, with only a limited number of suppliers able to offer LSMGO. HSFO availability also remains restricted. The Strait of Hormuz is one of the world's most important chokepoints for oil shipping, and any disruption there affects tanker traffic and fuel logistics across the Gulf region. Traders and bunker buyers typically track Fujairah's weekly inventory reports and freight flows for early signals of whether supply tightness eases or persists.
Source: By Tuhin Roy, ENGINE,
