Iran halts exports of 380 cSt product
8th August 2014 12:57 GMT

Exports of Iranian marine fuel oil have unexpectedly halted and will not resume for at least a month, according to a source at the National Iranian Oil Company (NIOC).

Trade sources, reported by Reuters, said Iran could be stocking up on fuel oil for power generation in case of a shortfall in gas supplies.

"NIOC International and National Iranian Oil Products Distribution Company (NIOPDC) stopped exports about two weeks ago," said the company source.

"Nobody knows how long it would take but it is not less than one month."

Some traders, meanwhile, estimated the halt could last for up to three months.

"They (Iranians) are trying to stockpile some fuel oil cargoes for October-November because there will normally be big shortages of gas so they have to burn a lot of fuel oil," said a Gulf-based trader, referring to demand from Iran's power stations.

Iran exports about 300,000-400,000 metric tonnes (mt) of bunker grade fuel oil a month, according to observers. Much of the output ends up in the Fujairah bunker hub.

Bunkerworld data shows Fujairah prices for 380 cSt intermediate fuel oil (IFO) spiked at the start of last week, widening the differential with Singapore averages to $28 per metric tonne (pmt).

The differential has since fallen but Fujairah prices remain some $6 pmt above Singapore and players this week said avails were tight .

The interruption to fuel oil exports from Iran comes at a time when the Asian fuel oil market was already braced for a fall in arbitrage volumes from the West, caused in part by high freight rates.


Nick Jameson, 8th August 2014 12:57 GMT
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