Marine insurer Allianz Global Corporate & Specialty (AGCS) on Tuesday (10 May) released the Safety & Shipping Review 2022 where it noted the effects of Russia’s invasion of Ukraine on the shipping industry.
This includes the cost and availability of bunker fuel which may force ship owners to use substandard alternative fuels.
An expanded ban on Russian oil could contribute to increasing the cost of bunker fuel and impacting availability, potentially pushing ship owners to use alternative fuels. If such fuels are of substandard quality, this may result in machinery breakdown claims in future, says the insurer.
The annual AGCS report, meanwhile, said the shipping industry has been affected on multiple fronts by Russia’s invasion of Ukraine, with the loss of life and vessels in the Black Sea, disruption to trade, and the growing burden of sanctions.
It also faces challenges to day-to-day operations, with knock-on effects for crew, the cost and availability of bunker fuel, and the potential for growing cyber risk.
It said a prolonged conflict is likely to have deeper consequences, potentially reshaping global trade in energy and other commodities.
“The insurance industry is likely to see a number of claims under specialist war policies from vessels damaged or lost to sea mines, rocket attacks and bombings in conflict zones,” said Justus Heinrich, Global Product Leader, Marine Hull, at AGCS.
“Insurers may also receive claims under marine war policies from vessels and cargo blocked or trapped in Ukrainian ports and coastal waters.”
The report also touched on decarbonisation of the shipping industry creating new risks.
With momentum gathering behind international efforts to tackle climate change, the shipping industry is coming under increasing pressure to accelerate its sustainability efforts, the report notes, given its greenhouse gas emissions grew by around 10% between 2012 and 2018.
Decarbonisation will require big investments in green technology and alternative fuels. A growing number of vessels are already switching to liquefied natural gas (LNG), while other alternative fuels are under development, including ammonia, hydrogen and methanol, as well as electric-powered ships.
The transition to alternative fuels will likely bring heightened risk of machinery breakdown claims, among other risks, as new technology beds down and as crews adapt to new procedures.
Note: A full copy of the ‘Safety & Shipping Review 2022’ can be found here.
Photo credit: Marine insurer Allianz Global Corporate & Specialty (AGCS)
Published: 12 May, 2022
Study undertaken in cooperation with the ship’s owner to investigate how various technologies can reduce bunker fuel consumption and emissions, it said.
‘LNG has been viewed colloquially as a bridge fuel […] but to which fuels does that bridge lead? This article suggests hydrogen as a fuel is a leading option,’ it said.
Bonded bunker sales for state-owned enterprises and Zhoushan enterprises were 1.71 mln mt and 157,900 mt, accounting for 91.56% and 8.44%.
Monjasa Trader is built to high specification for European coastal trade and very well maintained by her former sole owner, Neste Corporation in Finland.
“VPS is here to provide valuable advice on the optimisation of engine performance, asset protection and the reduction of GHG emissions,” it states.
Monjasa Provider got her new name and look painted during her Special Survey in Spain, before resuming refuelling operations in the English Channel.
Cash of SGD 4.43 million and USD 243,100, and one piece of 100-gram gold-coloured bar recovered in safe belonging to Abdul Latif Bin Ibrahim kept at Extra Space warehouse storage facility, show court documents.
Program introduces periodic assessments, mass flow metering data analysis, and regular training for relevant key personnel to better handle the MFMS to ensure a high level of continuous operational competency.
U.S. Claims Register Summary recorded a total USD 833 million claim from a total 180 creditors against O.W. Bunker USA, according to the creditor list seen by Singapore bunkering publication Manifold Times.
Glencore purchased fuel through Straits Pinnacle which contracted supply from Unicious Energy. Contaminated HSFO was loaded at Khor Fakkan port and shipped to a FSU in Tanjong Pelepas, Malaysia to be further blended.
Individuals were employees of surveying companies engaged by Shell to inspect the volume of oil loaded onto the vessels which Shell supplied oil to; they allegedly accepted bribes totalling at least USD 213,000.
MPA preliminary investigations revealed that the affected marine fuel was supplied by Glencore Singapore Pte Ltd who later sold part of the same cargo to PetroChina International (Singapore) Pte Ltd.
