Marine fuel traders in the Middle East's main bunkering centre — Fujairah in the UAE — are uncertain about a demand boost following the UAE's decision last week to open sea, land and air borders with Qatar.
Vessels of state-owned Qatargas were major buyers of bunker fuels from Fujairah, before the UAE, along with several other regional states, imposed a blockade in June 2017 banning Qatari ships from entering its ports.
The resolution of the dispute this month led some market participants to suggest that Fujairah will recoup around 2mn t/yr in sales volumes lost during the ban.
Fujairah's sales fell to 8-9mn t/yr in 2018-19, and even lower during 2020 as a result of weaker demand because of Covid-19 pandemic restrictions.
But traders in Fujairah believe a rise in bunker demand will not be substantial and is likely to not be immediate.
"During the blockade Qatar set up and improved its own bunker facilities and worked out ways to supply its own ships. This may dampen interest to buy bunker fuels in Fujairah, unlike pre-2017", a Fujairah-based supplier said.
Qatar started the supply of bunker fuel to ships calling at Ras Laffan in 2017, catering for the majority of Qatar's own LNG fleet. State-owned distributor Woqod recently acquired two 3,800t barges to enhance the operations.
"Unfortunately, the hype is on the back of historical liftings from Fujairah, when the volume was indeed considerable", a local bunker trader said.
"Qatargas owns 75 vessels and lifts roughly 75,000-85,000 t/month from Ras Laffan, which is half of its total demand for 75 vessels. The rest is bought from Singapore and other ports. Price, of course is important, but I personally do not expect them rushing back to Fujairah."
Nevertheless, some local suppliers in Fujairah have been looking to increase their barge capacity on expectations of higher demand.
"We may not see an uptick in first quarter 2021, but I believe later this year Qatari vessels will return. Even though the flow may not be as big as some predict", a bunker seller said.
