CFR Far East

　 The CFR Far East market surged from the previous week for both Japan and China delivery. As of Jul 23, the Japan Index stood at $804.25/mt for both propane and butane, up $118.00/mt week on week, while the China Index rose by $118.00/mt to $869.25/mt for both propane and butane. Market sentiment strengthened sharply as tensions in the Middle East escalated. With the Strait of Hormuz closed once again, Yemen's Iran-aligned Houthi forces reportedly attacked two Saudi Arabian oil tankers in the Red Sea on Jul 23, heightening concerns over regional stability. In addition to a sharp rise in crude prices, supply concerns resurfaced. Freight rates surged, while congestion at the Panama Canal began to disrupt vessel transits, raising concerns that supplies of US-origin cargoes into the CFR Far East market could decline. Against the backdrop, Kuwait Petroleum Corporation (KPC) conducted several sell tenders for cargoes containing butane for delivery into Asia. A 44,000mt 75:25 cargo for first-half August delivery was reportedly discussed at a premium exceeding $200/mt to the August CP.

FOB Middle East

　 Geopolitical tensions in the Middle East have intensified, resulting in the closure of the Strait of Hormuz. In addition, concerns have emerged that transit through the Bab el-Mandeb Strait, which links the Red Sea and the Gulf of Aden, might also carry heightened risks, affecting vessel operations along Red Sea shipping routes. A Middle Eastern trader affiliated with Saudi Aramco was planning to transport Yanbu loading cargoes to the Far East via an alternative route through the Suez Canal and around the Cape of Good Hope. The company was scheduled to load two cargoes from Yanbu in the near term, one of which is believed to be a 44,000mt 50:50 cargo. Against this backdrop, Middle Eastern gas suppliers have continued to supply cargoes from locations outside the Persian Gulf. KPC conducted its fourth DES-based sell tender for August-delivery cargoes late last week. The company was trying to buy a 44,000mt 50:50 cargo for Aug 1-20 delivery into Chiba.

Asia Pressurized Market

　 In the pressurized cargo market, buying interest strengthened after crude oil prices surged amid renewed tensions between the US and Iran, while sellers also began adopting a firmer stance. For South China loading, offer levels for August loading cargoes rose to premiums in the $190's/mt to the August CP. For Southeast Asia loading, a Malaysian oil company and a petrochemical company in Malaysia were both seen to have limited room to sell cargoes, making spot supply for August loading appear unlikely. Amid these developments, a sell tender conducted by a Chinese oil company operating a refinery in Brunei for one 2,500mt cargo loading on Aug 8-16 was reportedly awarded at a premium in the $160's/mt to the August CP. For delivery to Vietnam, a buy tender conducted by a Vietnamese importer for 1,700-2,000mt for loading in Haiphong during Jul 29-Aug 2 was believed to have been awarded at a premium in the high $190's/mt to the CP.