Oct 26, 2021
As a busy Hurricane Season causes widespread supply disruption in the US Gulf Coast, other parts of the world have been facing headwinds in demand. There is no doubt that oil demand is recovering as the world emerges from the Covid-19 pandemic, but uncertainty still lingers over how fast vaccines can combat the Delta variant in some parts of the world.
Predicting future demand is never easy – especially with the Covid-19 playing havoc with estimations – but the picture is gradually becoming clearer now than it has for some time. Many of the world’s major consumers are now less than 10 per cent off their pre-pandemic demand levels, and projections for demand are looking much healthier than before. According to the latest monthly reports from the International Energy Agency, oil demand could rise by as much as 1.6m barrels a day as we head into the fourth quarter, seeing continued upwards momentum towards the end of the year.
All this added volume in the market is good news for infrastructure providers, shippers, and storage and blending hubs – Fujairah chief among them. In this issue, we look at how stocks and balances at the port have been shaping up over the last quarter, and examine the role that Fujairah plays on the global stage.
Also in this edition of the magazine, we continue the exciting conversation about the evolving world of shipping fuels. As we discussed in the last issue, high sulfur fuel oil is far from done, given the further growth of scrubber installations and shifting supply dynamics keeping prices buoyant. Indeed, as the price of oil has risen in recent months, the gap between 0.5% sulfur marine fuel and 3.5% sulfur fuel oil has actually narrowed, showing that demand appears to be strong for the more traditional HSFO. Discussing fuel in this issue is Carsten Ladekjær, CEO of Glander International Bunkering. In a wide-ranging conversation, Ladekjær discusses the growing use of LNG as a fuel, as well as the prospects of more sustainable fuels, such as methanol and hydrogen. One area where Ladekjær is especially confident is the growth of Fujairah and its importance as a leading hub for the Middle East and beyond.
The increased demand in the oil markets, along with the new monthly injection of 400,000 b/d of OPEC+ crude, has increased liquidity and a strong sense of purpose in buyers. Such market activity should spark brisk trade in the main supply and bunkering hubs. It looks like a busy last quarter is on the way.