Connect with us

Business

Argus Media viewpoint: European marine fuels to feel diesel crunch

Russian oil products ban will affect Europe’s diesel supply most acutely, with the continent still relying on Russia for as much as 52% of its diesel imports in November.
Admin

Published

3 years ago

on

5e16c2fc7aa8e 1578550012 1

European marine fuels markets are set for a shake-up in 2023 when EU sanctions on Russian oil products come into effect, as a likely middle distillate supply crunch is being met with mixed demand signals.

21 December 2022

From 5 February all remaining imports of Russian oil products must be halted in the EU — after crude sanctions already took effect on 5 December — as part of the EU’s sixth package of sanctions against Russia in response to the country’s invasion of Ukraine.

The ban will affect Europe’s diesel supply most acutely, with the continent still relying on Russia for as much as 52pc of its diesel imports in November. But it will have a knock-on effect on supply of marine gasoil (MGO) too, with the shortfall likely to push diesel margins up early in the year and incentivise refiners to produce as much road diesel as possible at the expense of other gasoils, such as MGO.

Reduced MGO availabilities are already being recorded in Europe’s delivered bunker markets, with some refiners already reported to have issued bunker suppliers with warnings of possible shortages in 2023.

This anticipated drop in supply could be offset by steady availabilities of marine fuel oil grades. High-sulphur fuel oil (HSFO) with 3.5pc sulphur remains well-supplied in Europe and prices have remained broadly dampened in recent months, even though Russia has traditionally constituted the lead exporter of that product to Europe. Russian HSFO supplies to Europe were curtailed in August by EU coal sanctions, because heavy fuel oil is shipped under the same EU customs code. But falling Russian imports have been balanced by increased shipments from Saudi Arabia, Greece and the UAE.

Very-low sulphur fuel oil (VLSFO) supplies are also likely to buoyed into 2023 by strong production in Europe and the Mideast Gulf. The start-up of KPC’s new 615,000 b/d Al-Zour refinery will increase global VLSFO supply by as much as 10mn-12mn t/yr, which will either contribute to European stocks or displace European supply on its key arbitrage route to Asia-Pacific.

Supply of marine fuel oils will also depend on European refineries’ crude slates, and it remains to be seen how the continent will adjust without Russian Urals crude. Alternative medium-sour grades from the Mideast Gulf or Norway — the second phase of the Johan Sverdrup field started production in December — could support residual fuel oil output, but conversely, in the event of stiff competition for those grades, Europe could move to a lighter sweeter slate, cutting residual fuel yields.

Demand signals

Bunkering demand from containerships could decrease in 2023. The global shipping industry is at the mercy of recessionary pressures — economic slowdowns typically restrict the chartering and movement of goods along international shipping lines. International container trades makes up the fourth largest shipping sector by tonne-miles — a measure of how far freight travels — after tanker, bulk and dry cargoes, with the biggest share trading along the main east-west routes.

But this could be partially offset by stronger demand for other large shipping segments. Sanctions on Russian oil will push Europe to look further afield for supplies, which is already being reflected in sharp rises in clean-tanker freight rates as tonne-miles surge. That is likely to continue into 2023 and support bunker demand from tankers.

Recent statistics from Rotterdam show increased sales across all marine fuel grades in the third quarter of 2022, but economic headwinds could strengthen in coming quarters as energy supply shortages pinch industry and inflation rises.

Demand for MGO could rise comparative to other grades, after the International Maritime Organisation (IMO) announced on 15 December that it will adopt a 0.1pc sulphur Emissions Control Area (ECA) in the Mediterranean from 2024. Shipowners will look to scale up usage of the marine gasoil ahead of then, which in a short-supplied market could support prices for the grade.

By James Marriott and Jonah Sweeney

 

Photo credit and source: Argus Media
Published: 22 December, 2022

Related Topics:
Continue Reading

Winding up

Singapore: Xihe Holdings subsidiaries to be wound up voluntarily, creditors to submit claims

Creditors of Da Zhong Tankers and Xin Ying Shipping are required on or before 17 July 2026 to send in their names and addresses and particulars of their debts or claims to appointed liquidators, says notice.
Admin

Published

13 hours ago

on

June 19, 2026

By

steve pb from Pixabay

Xihe Holdings Pte Ltd subsidiaries Da Zhong Tankers Pte Ltd and Xin Ying Shipping Pte Ltd will voluntarily wind up following resolutions that were passed by written means, according to a Government Gazette notice published on Thursday (18 June).

The resolutions set out below were duly passed:

  • SPECIAL RESOLUTION – WINDING-UP

That the Company be wound up voluntarily pursuant to section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018.

  • ORDINARY RESOLUTION – APPOINTMENT OF LIQUIDATORS

That Paresh Tribhovan Jotangia and Ho May Kee of Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960 be and are hereby appointed as joint and several liquidators to conduct the said winding-up and that their remuneration be fixed on the usual scale of their professional charges for the work involved.

  • SPECIAL RESOLUTION – POWERS OF LIQUIDATORS

That the liquidators of the Company be authorised to exercise any of their powers given by section 177, 144 (1) and (2) of the Insolvency, Restructuring and Dissolution Act 2018 and to distribute to members, in specie, any part of the assets of the Company.

In another notice, the liquidator of the company said creditors are required on or before 17 July 2026 to send in their names and addresses with particulars of their solicitors (if any) to liquidator Paresh Tribhovan Jotangia at Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960. 

The liquidator may require creditors or their solicitors to “come in and prove their said debts or claims at such time and place as shall be specified in such notice or in default thereof, they will be excluded from the benefit of any distribution made before such debts are proved.”

Related: Singapore: Additional Xihe Holdings subsidiaries to be placed under judicial management

 

Photo credit: steve pb from Pixabay
Published: 19 June, 2026

Continue Reading

Winding up

Singapore: Liquidator of Parakou Shipping issues notice of dividend

Second and final dividend to admitted creditors of Parakou Shipping is payable by 14 July, according to Government Gazette notice.

Admin

Published

13 hours ago

on

June 19, 2026

By

Resized benjamin child

A notice of dividend for Parakou Shipping Pte Ltd, which is currently in voluntary liquidation, was published on the Government Gazette on Thursday (18 June). 

The following are the details of the notice:

Name of Company : Parakou Shipping Pte Ltd (In Creditors’ Voluntary Liquidation)
Address of Registered Office : c/o KordaMentha, 50 Raffles Place, 25-01 Singapore Land Tower, Singapore 048623
Amount per centum : 0.55 per centum of admitted claims (in accordance with the Order of Court HC/ORC 4175/2024)
First and Final or otherwise : Second and Final Dividend to admitted creditors (in accordance with the Order of Court HC/ORC 4175/2024)
When payable : By 14 July 2026
Where payable : c/o KordaMentha Pte Ltd, 50 Raffles Place, #25-01 Singapore Land Tower, Singapore 048623

Related: Singapore: Notice of intended dividend issued for Parakou Shipping Pte Ltd

 

Photo credit: Benjamin Child
Published: 19 June, 2026

Continue Reading

Alternative Fuels

MOL inks bio-LNG bunker fuel supply deals with Titan and Axpo for car carriers in Europe

Titan, part of Amsterdam-based Molgas, will continue to supply bio-LNG fuel in Northwest Europe, while Axpo will take charge of supply in the Mediterranean region.
Admin

Published

13 hours ago

on

June 19, 2026

By

MOL inks bio-LNG bunker fuel supply deals with Titan and Axpo for car carriers in Europe

Mitsui OSK Lines (MOL) on Thursday (18 July) said it has signed new supply agreements in Northern Europe and the Mediterranean region to expand the use of bio-LNG marine fuel on MOL-operated LNG-fuelled car carriers.

Titan, part of Amsterdam-based Molgas, will continue to supply bio-LNG fuel in Northwest Europe, while Axpo will take charge of supply in the Mediterranean region.

MOL said the agreement makes it possible for its company to supply bio-LNG fuel for automobile carriers in the Mediterranean region, specifically Port of Malaga and Barcelona in Spain, following the bio-LNG fuel supply agreement in Western Europe, which commenced in March last year.

The bio-LNG fuel to be supplied in this initiative has a lifecycle carbon intensity (carbon dioxide emissions per unit of energy consumption) of -15 g-CO2/MJ or less, from production through consumption. Furthermore, this bio-LNG fuel has obtained International Sustainability and Carbon Certification (ISCC-EU). 

“Through this supply agreement, MOL has established a framework that ensures a continuous and stable supply of bio-LNG fuel not only in Northern Europe but also in the Mediterranean,” the company said.

As part of the group’s efforts to adopt alternative fuels and achieve net-zero greenhouse gas (GHG) emissions, it is utilising LNG-fuelled vessels as a bridge solution to facilitate the transition to carbon-neutral fuels such as bio-LNG and synthetic LNG (e-methane).

In 2025, MOL signed a bio LNG fuel supply agreement in Northwest Europe with Titan, part of the Molgas, and MOL has continued this bio LNG fuel supply agreement with the same company in 2026 as well.

 

Photo credit: Mitsui OSK Lines
Published: 19 June, 2026

Continue Reading

Trending