Decision to divert fuel oil to Singapore

According to a Wednesday report by the UAE daily, The National, Iran has diverted large volumes of shipping fuel that would normally be sold through Fujairah to Singapore to avoid international sanctions. Fujairah has grown into one of the world's most frequented ship refuelling terminals. "Getting product from Iran is impossible. It's been like this for more than two months," said Nic Marinos, a broker at Agean in Fujairah. The report quoted Abolfazl Rostami, a senior trader at the National Iranian Oil Company (NIOC), as saying that Singapore was proving a better market for Iranian exports. Iranian fuel oil is of a high quality with a low ratio of sulphur, and fuel retailers normally blend it with lower quality oil before selling it on to ship owners. The drop in supply has caused prices in Fujairah to rise sharply, the report added. "This implies higher blending costs for Fujairah," said Barclays Capital in a report, adding that the cost of fuel sold in Fujairah rose further above prices paid in Singapore. Meantime, traders say disguising the origin of shipping fuel in Singapore is easier than in Fujairah because of the huge volumes in storage there.