Business

Argus Media: Asian LSFO margins exceed two-year lows on high supply

Singapore low-sulphur fuel oil margins against Dubai crude values have fallen to over two-year lows, against higher inflows to the city-state and demand, according to Argus Media.

Published

2 years ago

December 16, 2022

Admin

Singapore low-sulphur fuel oil (LSFO) margins against Dubai crude values have fallen to over two-year lows, against higher inflows to the city-state and demand possibly taking a hit from recessionary fears moving forward.

15 December 2022

Margins fell to $7.82/bl on 13 December, the lowest levels since the $7.72/bl on 2 November 2020, according to Argus' assessments.

The fall is likely the result of higher low-sulphur residual inflows to Singapore from the west of Suez and Asia-Pacific this month, market participants said, estimating it to be around 2mn t. Total low-sulphur residual inflows to Singapore in December are projected to be around 2.35mn t so far, higher than the average of 2.18mn t/month in 2021, according to data from oil analytics firm Vortexa.

Incremental LSFO inflows to Singapore from Kuwait – and expectations of more to come – is likely pressuring margins as well, traders said. Kuwait's state-owned KPC sold the first 100,000t (645,000 bl) LSFO cargo from its new 615,000 b/d Al-Zour refinery for 28-29 November loading. The cargo was likely sold to BP and loaded on the tanker Ridgebury Nicholas A from Kuwait over the same dates, and Fleetmon data shows the tanker's current position is in the Malacca Strait.

Al-Zour is a topping refinery which produces LSFO mainly for local power plants, with the excess to be exported. Al-Zour is projected to produce 10-12mn t of LSFO per year when all units come online, sources close to the company said, of which around 5mn t/year will be exported after domestic power generation and bunker demand is fulfilled. Apart from the LSFO cargo, KPC has sold two 80,000t heavy fuel oil (HFO) cargoes for December-loading, with one more 80,000t cargo for 20-21 December loading in the process of being sold.

India's state-controlled BPCL also recently resumed its VLSFO exports, offering three 20,000t cargoes for November and December-loading, its first offers since March. The first cargo has likely been discharged in Singapore in end-November, according to Vortexa data.

Singapore's onshore residual fuel oil inventories were at three-week highs of 20.306mn bl in the week to 7 December, according to Enterprise Singapore data, also just slightly lower than average inventory levels in December 2021 at around 20.375mn bl. Projected higher inflows to the city-state could increase supplies to higher than year-earlier levels, depressing margins.

Market participants also noted that bunker suppliers clearing stocks with the year-end closing of books could contribute to more sales and an injection of supplies into markets, though one said that not all companies' financial years conclude in December. Traders also said that fears of an impending recession have not hit bunker demand yet but could be factored into crack and spread values from January onward.

Delivered premiums, or the price of VLSFO bunkers over cargo, have been trending upwards so far in December to an average of $36/t compared to $29/t in November as a result of tight prompt supplies, according to Argus data.

Availabilities are now improving, local traders said, although premiums are also set to spike during the festive period for prompt deliveries as is typically the case. But overall demand sentiment is increasingly turning bearish going into the new year.

"I expect demand to be down significantly in the first quarter of next year relative to this year", a local trader said.

But VLSFO bunker prices in Singapore are currently significantly lower than in competing ports in South Korea and to a lesser extent, China, which could shift some demand to the city-state.

Singapore noted a strong increase in bunker sales in November but is set to see total consumption this year decline by about 2mn t relative to 2021, to about 48mn t.

By Sarah Giam and Sammy Six

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Photo credit and source: Argus Media
Published: 16 December, 2022

FuelEU

FincoEnergies launches pooling service for FuelEU Maritime compliance

FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable bio bunker fuels.

Published

12 hours ago

April 21, 2025

Admin

GoodFuels biofuel supplier FincoEnergies on Wednesday (16 April) announced the launch of its FuelEU Pooling service, created to enable shipowners to meet FuelEU Maritime compliance in a cost-effective way.

FuelEU Maritime, effective from 1 January 2025, mandates the reduction of greenhouse gas intensity of energy used on board ships trading in the EU. For many operators, particularly those with limited access to low-carbon fuels, compliance can be both complex and costly.

Designed for shipowners, operators, charterers, and technical managers, FincoEnergies’ FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable biofuels, when these vessels are overcompliant and have ‘Surplus’ emission reduction available for allocation.

FincoEnergies also partnered with Lloyd’s Register (LR), who supported the development of the service. Their technical expertise has enabled shaping a solution that aligns with both regulatory requirements and FincoEnergies' established position as a biofuel supplier in the fuel supply chain.

“FuelEU Maritime represents one of the most important regulatory shifts for the shipping industry in decades,” said Alberto Perez, Global Head, Maritime Commercial Markets at LR. “By integrating technical expertise with strategic guidance, we ensure shipowners, operators, and suppliers not only comply with evolving emissions standards, but also proactively transform their operations, embracing new technologies and alternative fuels to ensure a sustainable and profitable future.”

“With a decade of experience in biofuel bunkers and carbon certificate trading in the voluntary market, we are excited to expand our creative and solution-oriented product portfolio with FuelEU Pooling,” said Johannes Schurmann, Commercial Director International Marine at FincoEnergies.

“Thanks to our physical presence in the supply chain, shipping companies looking for FuelEU surplus can confidently rely on us as a trusted partner in their decarbonisation journey.”

Through its role as Pool Organiser, FincoEnergies streamlines the entire pooling process – from performing biofuel bunkers and prefinancing Surplus, to Surplus allocation and pool verification. With cost-effective pricing, FuelEU Pooling provides shipping companies with a competitive alternative for changing their fuel mix themselves.

Photo credit: FincoEnergies
Published: 21 April, 2025

ECA

PO/Marine launches supply of MED ECA-compliant ULSFO bunker fuel

In preparation of the upcoming Mediterranean Emission Control Area regulation, PO/Marine successfully delivered its first supply of ULSFO with 0.10% sulphur content on 15 April.

Published

12 hours ago

April 21, 2025

Admin

Aydın Yıldız, Head of Marine Sales at Petrol Ofisi Group

Petrol Ofisi’s bunkering arm PO/Marine on Thursday (17 April) said it has completed the bunkering operation of ULSFO—a marine fuel with 0.10% sulphur content—in alignment with the upcoming Mediterranean Emission Control Area (MED ECA) regulation.

Under the new regulation, all vessels operating within the Mediterranean must use low-sulphur marine fuels.

Effective 1 May 2025, the Mediterranean will officially be designated as an Emission Control Area (MED ECA), prohibiting the use of marine fuels with sulphur content exceeding 0.10%.

In preparation for this regulatory transition, PO/Marine successfully delivered its first supply of ULSFO (Ultra Low Sulphur Fuel Oil) with 0.10% sulphur content on 15 April.

PO/Marine launches supply of MED ECA-compliant ULSFO bunker fuel

Aydın Yıldız, Senior Maritime Manager at Petrol Ofisi Group, said: “Our leadership in the maritime fuel sector is defined not only by our market share but also by the innovative steps we take to shape the industry.

“Successfully completing the supply of marine fuel with 0.10% sulphur content in alignment with the MED ECA transition in Türkiye is a concrete reflection of this. We previously led the way with the country’s first VLSFO bunkering operation, setting a precedent in our sector.

“With our ULSFO bunkering, we have once again demonstrated that we are setting the standard in Türkiye’s marine fuel landscape. The designation of the Mediterranean as an Emission Control Area is not only a regional development but a historic turning point for global maritime operations.”

Photo credit: PO/Marine
Published: 21 April, 2025

Bunker Fuel

Oilmar completes first ULSFO bunker fuel delivery in Türkiye

Company announced the successful completion of its first ULSFO 0.1% Sulphur delivery in Istanbul and is now offering the marine fuel in several key locations including Istanbul Anchorage and Marmara Sea.

Published

12 hours ago

April 21, 2025

Admin

UAE-based marine fuel and petroleum products trader Oilmar DMCC on Friday (18 April) announced the successful completion of its first ULSFO 0.1% Sulphur delivery in Istanbul, marking one of the very first trades of its kind in the country.

“With this milestone, Oilmar proudly steps forward as one of Türkiye’s pioneering trading companies in ULSFO 0.1% Sulphur fuel,” it said in a social media post.

Oilmar is now offering ULSFO 0.1% across key locations:

Istanbul Anchorage
Marmara Sea
Gulf of Derince
Bozcaada Anchorage
Southern Türkiye Ports

In addition, High Sulphur Fuel Oil (HSFO), Very Low Sulphur Fuel Oil (VLSFO), Ultra-Low Sulphur Fuel Oil (ULSFO), and Low Sulphur Marine Gasoil (LSMGO) are available at all ports across Türkiye.

Photo credit: Dima Rogachevskiy on Unsplash
Published: 21 April, 2025