The Qatar diplomatic impasse was continuing to weigh on Fujairah’s bunker industry, with marine fuel sales in the Port of Fujairah falling more than 20% year on year to well under 6.5 million mt to date in 2018, industry sources estimated recently.
“With the Qatar issue, some buying inquiries are not coming back anytime soon,” a Fujairah bunker fuel trader said.
The diplomatic crisis erupted last June, when Saudi Arabia, the UAE, Bahrain and Egypt imposed sanctions on Qatar, and has continued since.
The Saudi-led bloc accused Qatar of backing militant groups across the Middle East, and forging ties with regional rival Iran. The allegation was refuted by Qatar.
The bloc imposed restrictions on Qatar covering diplomatic relations, travel and trade, including some restrictions on bunkering at Fujairah.
“It is a tough market going forward; there are still around 15 to 16 licensed sellers here and all will still be fighting for market share,” the trader said.
In March, global bunker supplier Aegean said it had reduced its bunkering presence in Fujairah.
Chemoil Middle East DMCC ceased physical supply in the UAE’s Fujairah port in April, Platts reported this week, citing trade sources.
“We are hearing more suppliers are moving out of the market and reducing their barges,” another Fujairah-based bunker trader said. In April, S&P Global Platts reported that Qatar Fuel Company, or Woqod, planned to invest around Riyals 634 million ($174 million) this year on expansion projects in Qatar to meet domestic demand for several products, including bunker fuel.
Last year, the company said it was coordinating with Qatar Petroleum to carry out ship-to-ship bunkering operations from bunkering facilities in Ras Laffan. The move made it less reliant on other ports, including Fujairah, for bunker calls.
However, some sources remained optimistic about the outlook for Fujairah’s bunker industry.
“We have lost some bunker volumes but we have also lost some suppliers. so the market balance is restored,” a bunker supplier said.
Any upswing in oil prices could also bode well for Fujairah’s storage industry, as could better macroeconomics, for the UAE in particular and for the world economy in general in 2018, sources said.
Fujairah, which is strategically located along one of the world’s major shipping routes, continues to be among the top bunkering hubs globally as it advances plans to build more storage ahead of the introduction of the International Maritime Organization’s global sulfur cap rule, some sources said. Its status as a global trading hub made another significant advance in April when UAE-based Brooge Petroleum and Gas Investment Company said it planned to boost storage capacity for crude and oil products in Fujairah.
Fujairah had an estimated 56 million barrels of oil storage capacity at the end of 2016, according to Platts Analytics estimates.
Source: PlattsPrevious Next