Oil product stocks at the UAE port of Fujairah have hit their highest level since June 2021, as heavy rains and flooding July 27-28 caused bunkering disruptions at the world's third-largest bunkering hub.
An 18% build in light distillate volumes pushed total oil inventories at the port to 23.385 million barrels as of Aug. 1, a gain of 4.5% from the previous week, according to data from the Fujairah Oil Industry Zone provided exclusively to S&P Global Commodity Insights.
Stocks of light distillates, including gasoline and naphtha, rose by 1.156 million barrels to 7.596 million barrels. Market sources said the East of Suez gasoline complex was under downward pressure due to weak demand from Pakistan, as the country struggles with its foreign currency reserves.
"Pakistan normally imports around 700,000 mt of gasoline a month, however, in July I estimate they imported less than 500,000 mt," a trader said.
Middle distillate stocks, including diesel and jet fuel, rose by 187,000 barrels, or 6%, on the week to 3.308 million barrels. Ample supplies in the region and reduced opportunities for arbitrage cargoes to the West were depressing the market, traders said.
Heavy residue volumes were the only category to draw in the week, with inventories falling 332,000 barrels, or 2.6%, to 12.813 million barrels. Even with the decline, heavy distillate stocks remained above 12 million barrels for the fifth consecutive week.
Loading congestion at the terminal likely prevented a bigger draw, with demand for fuel oil for power generation still strong in during the Middle Eastern summer.
The ongoing disruptions caused the Platts Fujairah-delivered marine fuel 0.5%S bunker spread against Singapore cargo values to surge to an all-time high of $75/mt on Aug. 3.
Market sources said they expect another eight to 10 days of operational delays, as terminal loadings for barges waiting to refuel have yet to resume.