09 March 2022
The discount of very-low sulphur fuel oil (VLSFO) bunkers in far east Russia has fallen to record levels versus Singapore values, as many shipowners have stopped buying because of the country’s increasing economic isolation following the invasion of Ukraine.
Argus today assessed the far east Russia VLSFO discount to Singapore at $288.83/t, when typically the discount averages around $20/t.
Japanese and South Korean shipowners and operators have completely stopped buying from Russia, several market participants told Argus. Nearly all remaining enquiries are from Chinese buyers, who have not curtailed oil imports from Russia unlike most companies from other countries that fear legal or reputational repercussions.
“Most suppliers and traders are scrutinising where vessels have been over the past few months and if they have called at Russia, then they won’t quote on it in order to ensure no breach of sanctions”, a broker said.
“Vessels moving into Russian ports now would almost certainly face great difficulty getting bunkers elsewhere for the next 6-12 months depending on how the conflict pans out”, the broker added.
But despite the substantial discount, Russian trading firms were still booking some profits because of the strong depreciation of the ruble against other currencies. Some Chinese buyers were possibly paying for bunkers in cash in yuan, although this could not be confirmed.
By Sammy Six
Photo credit and source: Argus Media
Published: 10 March, 2022
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