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Lower Oil Prices Do Not Remove Physical Fuel Supply Risk
Oil prices declined sharply at the start of August, with the Wall Street Journal reporting a market level of approximately USD 80.34 per barrel.
The decline may reduce some immediate cost pressure, but it does not eliminate the risks facing physical fuel buyers.
Crude oil and refined products can move differently
EN590 diesel, jet fuel and marine gasoil are influenced by their own supply balances.
Product prices depend on:
- refinery utilisation
- maintenance and outages
- regional inventories
- seasonal consumption
- blending requirements
- export restrictions
A fall in crude oil may be offset by stronger product cracks or limited regional availability.
Freight can absorb the benchmark decline
For CIF and CFR transactions, a lower product value can be partly or fully offset by higher logistics costs.
Delivered prices remain sensitive to:
- tanker supply
- voyage distance
- route security
- insurance
- port congestion
- waiting time
This is particularly important when cargoes must avoid disrupted waterways or use longer alternative routes.
Buyers should distinguish indications from executable offers
A market indication is not a cargo reservation.
An executable physical offer must be supported by:
- confirmed allocation
- defined specification
- realistic shipment window
- destination-specific freight
- inspection procedure
- documented settlement stages
The lowest headline price is not necessarily the lowest executable delivered cost.
ALGHAF MARINE confirms final pricing and cargo allocation through its Trading Portal after the contractual conditions have been completed.