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KPI OceanConnect: Five Reflections On IMO 2020

‘The bunker price volatility this year […] is a textbook example of why it pays to consult with your marine fuels supplier to help manage this risk,’ says CEO Søren Høll.

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Soren Hall KPI Ocean Connect Reflections

Søren Høll, CEO at International bunker trading firm KPI OceanConnect, on Tuesday (18 August) published an article sharing his reflections on regulations and other unforeseen market dynamics in 2020 have disrupted the bunker fuel market, and outlines the relevance of his company’s role in weathering these forces: 

IMO 2020, or ‘MARPOL Annex VI, regulation 14’ as it was less memorably known back when we started preparing for it in 2018, was always going to bring huge changes for shipping.

For some people it was even going to be as substantial as ships’ switch from coal to oil in the early 20th century. Those predictions have fortunately proven to be unfounded so far, but there hasn’t been any shortage of challenges for our industry in the wake of IMO 2020’s arrival.

 During the last few weeks as we’ve been concluding our merger with OceanConnect and I’ve had a chance to reflect on how far we’ve come this year.

 –      It’s easy to forget that crude prices started to slide not only because of Covid-19 in February and March, but also due to disagreements within OPEC+ about how much oil they should produce. Covid-19 has reduced demand for oil, and created a huge glut of both crude and refined products. Even if a vaccine emerges soon, we’re unlikely to see this oversupply abate entirely; not least because countries like Venezuela, Libya, and Iran with huge crude reserves are currently ‘offline.’

–      At times in January it looked as though shipowners who’d invested in scrubbers for their fleets could see payback periods of less than two years in some cases. By March, however, the spread between 3.5% HSFO and 0.5% VLSFO dropped to as low as $40 a tonne from over $300, and payback periods are now commonly assumed to be at least four or five years. We’re unlikely to see sustained interest for retrofitting scrubbers as long as the spread remains low. On newbuilds, I’m slightly more optimistic about positive economics.

–      By common estimates, the three biggest cruise lines, Carnival, Norwegian, and RCCL together on average consumed about half a million tons of bunkers each month in 2019. For context, that’s more than 10% greater than total fuel sales of Panama registered by the AMP. Especially for physical suppliers in cruise hotspots like the Caribbean, which supports about a third of global cruise voyages, bunker demand is unlikely to return in full before 2022 at the earliest.

–      The bunker price volatility we’ve seen this year – and in many previous years – is a textbook example of why it pays to consult with your marine fuels supplier to help manage this risk. I was talking to a longstanding client last week, and for her there are three big advantages to be gained from  hedging and risk management: Reduced volatility reduces cost of capital; knowing there will be no abrupt cost increases means that they can more easily plan ahead; and by smoothing out revenue and expenses they know they won’t need to borrow on unfavourable terms because they’ve got good liquidity.

 The merging of KPI Bridge Oil and OceanConnect brings together a wealth of knowledge and expertise, new ideas and ways of thinking, and a renewed energy to a changing marketplace. There’s no shortage of challenges ahead for the shipping or bunkering markets, but I’m very optimistic about the company we’re building and the value we can provide. 


Photo credit: KPI OceanConnect
Published: 20 August, 2020

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Legal

Singapore police arrest eight over alleged illegal MGO transaction off Tuas

SPF says preliminary investigations found that crew members of a Singapore-registered tugboat misappropriated MGO worth about SGD 10,570 without their company’s knowledge and sold it illegally.

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Singapore police arrest eight over alleged illegal MGO transaction off Tuas

The Singapore Police Force (SPF) on Thursday (13 August) said it has arrested eight men, aged between 25 and 54, for their suspected involvement in an illegal transaction of Marine Gas Oil (MGO).

On 13 August 2026 at about 1.05am, officers from the Police Coast Guard (PCG) conducted a check on a Singapore-registered tugboat in the waters off Tuas and discovered that eight crew members were possibly involved in the illegal transaction of MGO. 

“Preliminary investigations revealed that the crew members of the tugboats misappropriated MGO valued at about SGD 10,570 (USD 8,258), without their company’s knowledge,” SPF said in a statement.

“The MGO was sold illegally for their personal financial gain.”

The eight crew members will be charged in court on 14 August 2026 with the offence of theft by servant of property in possession of master under Section 381 of the Penal Code 1871 If convicted, they shall be punished with an imprisonment term that may extend to seven years and shall also be liable to fine.

“The Police take a serious view of illegal transaction of MGO in Singapore Territorial Waters and will continue to conduct enforcement and security checks to prevent, deter and detect such illicit activities in Singapore waters,” SPF added. 

 

Photo credit: Singapore Police Force
Published: 14 August, 2026

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Port & Regulatory

Gard: Sulphur-related bunker claims rise amid tighter China MSA enforcement

Claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea.

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shraga kopstein on Unsplash

Maritime protection and indemnity (P&I) club Gard on Wednesday (12 August) highlighted that claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea:

Rise in off-spec sulphur claims

Recent claims experience indicates that bunker quality continues to pose a significant operational risk for shipowners. In our earlier review of bunker-related claims during the first five months of 2026, we highlighted a rise in off-specification bunker incidents amid increased pressure on global fuel supply chains following the escalation of the conflict in the Middle East. 

Specifically for Sulphur compliance, between January and June 2026, the number of sulphur-related cases increased by more than threefold compared with the same period in 2025. Notably, the number of cases recorded in the first six months of this year has already exceeded the total number reported during the whole of last year by approximately 40%. 

While each case is fact-specific, the increase is notable because excessive sulphur content constitutes a MARPOL compliance issue. Unlike many other bunker quality problems, sulphur non-compliance identified through port state inspections can result in vessel delays, enforcement action, and substantial costs associated with debunkering and fuel disposal. 

The map below illustrates the geographical distribution of sulphur-related claims recorded during the first six months of 2026, based on the location where the bunkers were stemmed.

Distribution of sulphur related claims

China MSA steps up sulphur compliance enforcement

According to our correspondent, Huatai, on 5 June 2026, the maritime authorities of Tianjin, Hebei, Liaoning and Shandong jointly launched a special campaign on ship pollution prevention and control in the Bohai Sea region. The campaign involves coordinated supervision by local MSA branches across the region and is expected to last nearly five months. It covers major ports and surrounding port areas in the Bohai Sea region, including Tianjin, Tangshan, Qinhuangdao, Huanghua, Jinzhou, Yingkou and Longkou. 

While the initiative is broader than bunker sulphur compliance alone, its scope includes inspections relating to air pollution prevention, SOx emissions, fuel compliance and other high-pollution-risk operations. Enforcement measures are expected to comprise onboard inspections, cross-regional enforcement activities, unannounced spot checks and remote monitoring. These efforts will be supported by a combination of UAV patrols, maritime patrol vessels, shore-based monitoring systems and rapid on-site fuel testing. 

As a result, vessels trading in the Bohai Sea region may experience increased scrutiny of fuel compliance documentation, fuel sampling records, onboard fuel management procedures, and the handling or disposal of suspected non-compliant fuel.

Documents typically requested by China MSA

Based on our recent experience, including the case discussed above, and subject to the specific requirements of the local MSA office, owners and operators may be requested to provide supporting documentation such as: 

  • Bunker documentation – Bunker Delivery Notes (BDNs), MARPOL fuel sample records, fuel test reports, and relevant fuel quality certificates. 
  • Statutory certificates – including the International Air Pollution Prevention (IAPP) Certificate and International Oil Pollution Prevention (IOPP) Certificate. 
  • Operational records – engine logbooks, deck and navigation logbooks, Oil Record Book entries, and records relating to fuel transfers, storage and consumption. 
  • Sampling documentation – the Master’s statement and any records demonstrating how fuel samples were drawn, sealed, labelled, handled and retained. 
  • Correspondence records – communications with the authorities, bunker suppliers, charterers and other relevant stakeholders. 
  • Fuel disposal records – approved disposal plans, debunkering documentation, receipts and evidence of final disposal, where applicable. 

The exact documentation required will depend on the nature of the investigation, the findings of the inspection, and the requirements of the local enforcement authority. 

Possible regulatory consequences in China

Under the Air Pollution Prevention and Control Law of the People’s Republic of China, ocean-going vessels are required to use fuel oil meeting atmospheric pollutant control requirements after berthing. Vessels operating within designated emission control areas must also comply with applicable emission standards. Article 106 provides that where vessel fuel oil fails to meet applicable standards or requirements, the competent maritime authorities may impose fines ranging from RMB 10,000 to RMB 100,000. Liability may extend to shipowners, ship operators and ship managers depending upon the circumstances of the case. 

Recommendation

Sulphur compliance should be treated as both a fuel quality and regulatory risk. Owners and operators are encouraged to take preventive steps before bunkering, act promptly if non-compliant fuel is suspected, and preserve evidence carefully if an inspection or claim arises. Under amended 

Resolution A.1206(34), Appendix 18, 2.1.5, if the BDN shows compliant fuel, but the master has independent test results of the fuel oil sample taken by the ship during the bunkering which indicates non-compliance, the master may document this by notifying the ship’s flag Administration, with copies to: 

  • the competent authority of the relevant port of destination, 
  • the Administration under whose jurisdiction the bunker deliverer is located, 
  • and to the bunker deliverer.

 

Photo credit: shraga kopstein on Unsplash / Gard
Published: 14 August, 2026

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LNG Bunkering

Shell expands LNG bunkering footprint in Spain with Valencia

As one of the region’s key maritime hubs, the company said Valencia expands the options available to shipowners seeking LNG supply along major shipping routes.

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Shell expands LNG bunkering footprint in Spain with Valencia

British oil giant Shell on Thursday (13 August) said Valencia has joined its growing network of bunkering locations, making LNG available as a marine fuel.

The successful completion of the first LNG bunkering operation in Valencia marked an important milestone for Spain and further strengthened Shell’s LNG supply capabilities across the Mediterranean. 

In a video shared by the company, bunkering vessel Alice Consulich was shown supplying an undisclosed volume of LNG to the container ship MSC Sabrina.

“As one of the region’s key maritime hubs, Valencia expands the options available to shipowners seeking LNG supply along major shipping routes,” Shell said in a social media post. 

Shell said the achievement reflected the strong collaboration across the maritime value chain, including MSC Mediterranean Shipping Company, the Port of Valencia and Fratelli Cosulich Group.

“We look forward to making more LNG bunker deliveries in Valencia and across the Mediterranean as LNG infrastructure and capabilities continue to expand,” the company said. 

 

Photo credit: Shell
Published: 14 August, 2026

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