The bunker fuel supply crisis in major shipping hubs has eased despite the impact of the Iranian war, which led to a reduction in exports through the Strait of Hormuz, as the market was able to adapt to previous supply shocks, according to what industry sources participating in the Asia-Pacific Petroleum and Energy Conference (APEC) said on Thursday.
Rishi Nayani, Managing Director of Emirates Maritime Shipping Company, said during a discussion session at the conference: “We do not see any problems in obtaining fuel and supplying it to ships until today,” according to Reuters.
Niani added that there is currently no shortage of bunker fuel, known as marine fuel, in major shipping hubs, unlike the situation that prevailed in March and April, noting that refueling costs have actually risen.
As of this week, prices for very low sulfur fuel oil (VLSFO), the main fuel used in Singapore, the world's largest bunkering hub, had risen more than 60 percent compared to pre-war levels, according to data from market sources.
Prices witnessed a sharp rise after the US-Israeli attack on Iran in late February, and remained volatile during the past six months, but they have now fallen slightly from their record levels recorded in March.
“There is no shortage of fuel oil currently, but there is a state of uncertainty about the possibility of minor supply disruptions,” said Max Tai, head of the heavy products division in Asia at Repsol Refining Company.
Tai added during a similar discussion session: “There are disruptions in supplies from the Strait of Hormuz, but we have alternatives available.”
The challenge, Tai explained, is the uncertainty surrounding securing blend stocks used in bunker fuel production that meet the specifications of certain buyers and markets.
As for the port of Fujairah in the United Arab Emirates, another major center for bunkering, Tai estimated that bunkering activity had returned to about 40 percent of pre-war levels, while bunkering activity in Singapore had remained stable since the beginning of the war.
Niani, a representative of Emirates Maritim, told the committee that some oil was still crossing the Strait of Hormuz despite continued tensions.
“The Strait of Hormuz is not closed,” Niani said. There are approximately 10 to 15 crossings in both directions,” he said, referring to the daily crossings of cargo ships through the Omani corridor on the southern side of the strait. He added: “There is oil being transported.”
However, high fuel prices led to rationing of purchases.
“We can provide replacement drums, but if the price is not right for us or our customers, it won’t go on the market... so the quantities will start to decrease a little bit,” Shen Maozhong, chief operating officer of Equatorial Marine Fuel Management, a ship fuel supplier, said during a separate panel discussion at APEC on Thursday.
“Theoretically, is there an offer?” Chung added. Yes. But will it be put on the market at these prices? Maybe not.”
One of the most prominent trials targeting a Chinese technology company began in the United States, after the American prosecution described Huawei as a “criminal entity” that built part of its global empire by stealing trade secrets from American companies and abusing the financial system, while Beijing rejected the accusations, stressing its support for Chinese companies in protecting their rights.
Taylor Stout, a lawyer at the US Department of Justice, told the jury in the federal court in Brooklyn that the case is based on “theft, lies, and cover-up,” accusing Huawei of following these practices over a period of 20 years with the aim of achieving dominance in the global telecommunications industry.
Prosecutors say the company "conspired to steal trade secrets from five American companies to gain a competitive advantage, including the source code for the operating system for Cisco Systems' Internet routers and a robotic arm used by T-Mobile to test phones." Stout said that the trial will include testimonies from people who arrested Huawei employees while trying to obtain American technology, noting that there is a video recording of one of the employees in an incident related to the robotic arm.
But the defense team presented a completely opposite narrative, saying that the US government was trying to turn ordinary commercial competition into a criminal case. Brian Heberlig, one of Huawei's lawyers, said that the case is related to "competition, not conspiracy, and innovation, not theft," stressing that the company achieved its success through its efforts, and that there was no institutional plan to commit crimes. He added that the prosecution is selecting separate incidents and presenting them as evidence of a broad conspiracy. He described the incidents related to “Cisco” and “T-Mobile” as individual actions of employees, which the administration dealt with after discovering them. He also referred to the incident of an employee taking unauthorized photos of a Fujitsu device, saying that the employee was quickly dismissed.
Beijing responded to the accusations, as the Chinese Ministry of Foreign Affairs said that the government “strongly opposes the American side’s suppression of Chinese companies and attempts to contain them,” stressing that it supports Chinese companies in defending their rights and legitimate interests.
The case goes beyond accusations of technology theft to Huawei's dealings with Iran. The prosecution began in 2018 by accusing the company and its CFO, Meng Wanzhou, of bank fraud and violating sanctions, before it later expanded to include accusations of engaging in organized criminal activity. The prosecution says that Huawei concealed the nature of its business in Iran to pass dollars through the American financial system, and also accused it of helping to provide capabilities that the Iranian authorities could use to monitor its citizens.
On the other hand, the defense says that there is no evidence that Huawei knew that its dollar clearing operations would violate US sanctions, noting that the banks in question were aware of the company’s business in Iran, yet they continued to compete to obtain their transactions.
The trial brings back to the forefront the case of Meng, who was detained in Vancouver in 2018 under an American warrant, and fought a legal battle against her extradition that lasted about three years, before her return to China as part of a settlement that included the United States, China, and Canada. Although the charges against her were dropped in 2022 under an agreement to postpone prosecution, the statements she made are expected to be used as evidence during the trial, which may last three months.
The case is based in part on reports published by Reuters in 2012 and 2013 regarding relations between Huawei and Skycom, which operated in Iran. The agency reported that in 2010, Skycom offered to sell Hewlett-Packard computer equipment subject to restrictions, with a value of no less than 1.3 million euros, to an Iranian telecommunications operator. The trial gains importance beyond Huawei's legal responsibility, as it comes at the heart of the escalating technological competition between Washington and Beijing. The company, known for its telecommunications equipment and phones, has also become a growing player in artificial intelligence chips, at a time when its network equipment is subject to American restrictions, and suppliers need Washington’s approval to export American technology to it.
Thus, the courtroom turns into a new arena in the US-China technology dispute, as the prosecution seeks to prove that the rise of Huawei was linked to an institutional pattern of violations, while the defense will attempt to prove that Washington is reinterpreting decades of commercial competition as a criminal conspiracy. The ruling will be important not only for the company's legal future, but also for the course of the confrontation between the two powers over technology, trade, and national security.
Chinese markets moved cautiously on Thursday, as stocks in the mainland and Hong Kong fell under pressure from rising oil prices and renewed fears of inflation, while the yuan maintained levels close to its highest levels in three and a half years, benefiting from strong exports and a relatively weak dollar.
The Shanghai Composite Index fell 0.4 percent, the CSI 300 Index of leading stocks fell by the same percentage, while the Shenzhen Index fell 0.7 percent. In Hong Kong, the Hang Seng Index fell 1.3 percent, and the Technology Index fell 2.1 percent.
The losses came as part of a broader wave in Asian markets, after Brent crude remained above $100 a barrel as a result of the escalation of attacks on maritime shipping traffic in the war with Iran. The rise in oil brought to the fore fears of a new wave of inflation that might push central banks to keep their monetary policies more stringent.
For investors in China, the impact is not limited to rising energy costs, but also extends to global markets. The yield differential between ten-year US Treasury bonds and their Chinese counterparts widened to its highest level ever, after a jump in US yields amid fears that rising oil would fuel inflationary pressures.
Attention is now turning to US consumer price data, which will play a pivotal role in determining whether the Federal Reserve will raise interest rates at its next meeting.
Analysts at OCBC Bank said that the Federal Open Market Committee’s decision in September “is still unresolved,” with investors waiting for inflation numbers to get a clearer signal about the path of monetary policy.
In contrast to the weakness of stocks, the yuan remained stable near its highest levels since February 2023, and had risen in recent sessions, supported by improved export and inflation data, in addition to the weakness of the dollar resulting in part from the strength of the Japanese yen.
This consolidation reflects the Chinese currency's ability to benefit from the strength of the external sector, even at a time when domestic demand remains a major weakness in the economy. Chinese exports showed strong growth during August, led by high-tech products and sectors related to artificial intelligence.
But the rise in the yuan puts the People's Bank of China in front of a delicate equation. On the one hand, a stronger currency helps reduce the cost of imports and energy, which is important in light of the rise in oil. On the other hand, its rapid rise may put pressure on exporters, who currently represent one of the most prominent sources of support for growth.
Therefore, the Central Bank continued to manage the exchange rate cautiously by setting reference rates that indicated a preference for a gradual rather than rapid appreciation of the currency.
In the local market, the picture was not entirely negative. A recent survey showed that American companies operating in China have become more optimistic about their business prospects after confidence had fallen to record low levels last year, amid political tensions, slow growth and local competition.
The technology sector also remained in the spotlight after reports that the artificial intelligence company DeepSec was preparing for an initial public offering on the Star Market on the Shanghai Stock Exchange, in a move that reflects the continued appetite for financing advanced technology sectors.
However, the overall market direction will remain largely linked to external factors in the short term. The continuation of oil above $100, the rise in US bond yields, and the possibility of tightening monetary policy in the United States are all factors that increase pressure on risk appetite.
On the other hand, the strength of exports and the consistency of the yuan give China some protection against these pressures, but it does not eliminate the basic problem of weak internal demand.
This is why Chinese markets currently seem governed by a double equation: Between relative support from the currency and the external sector, in the face of global pressures from oil, interest and inflation. The course of US price data over the coming days will determine which of these two trends will have the upper hand in the movement of stocks and the yuan.
