600,000 Tons of Fuel Oil Head for Singapore

600,000 Tons of Fuel Oil Head for Singapore

Around half of Iran's estimated 1.2 million tons of fuel oil exports loading in February are expected to reach Singapore, market sources said this week.
Iran is believed to have exported around 760,000 tons of fuel oil in January, of which Singapore likely received around 100,000 tons late in the month, Platts reported.
The other half of Iran's February exports will likely flow into the Fujairah bunker fuel market, the sources said.
Before sanctions were imposed in 2011, Iran had been exporting around 600,000 tons per month of fuel oil, just under half of which flowed into Singapore, traders said. Singapore received an average 270,000 tons /month of fuel oil imports from Iran in 2010, according to International Enterprise Singapore data.
"These February cargoes from Iran are being brought in by major trading companies," said one source, declining to name the companies. "At least five vessels carrying 75,000 tons each are coming to Singapore," another trade source said. The total could be as high as eight vessels, other trade sources said.
Iran's fuel oil exports in January were up 81% from around 420,000 tons in January 2015 while February exports are roughly double the year before, industry sources said.
Coinciding with the lifting of sanctions, Iran's exports of fuel oil have been boosted in the past two months by a mild winter that dampened domestic demand for fuel oil for heating, the increasing availability of gas for heating and the likely decrease in storage availability for fuel oil as tanks were filled with crude oil due to the current price climate, trade sources said.
On the flipside, post-sanctions' shipments from Iran are facing hurdles due to the unavailability of protection and indemnity coverage from some insurers and ambiguity over reinsurance coverage, which was posing logistical challenges, sources said.
Cargoes coming to Singapore may end up in floating storage while access to landed terminals in Singapore was negotiated, as some terminals have declined to accept Iranian fuel oil cargoes, trade sources said.


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