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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.

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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

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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