Bunker Fuel

Argus Media viewpoint: HSFO to face continued strain

Supply pressures will continue to elevate European fuel oil prices in 2024 while bunkering hubs outside Europe might grow in prominence; market is predicting lower demand for bunker fuels in Europe in 2024.

Published

1 year ago

December 19, 2023

Admin

Supply pressures will continue to elevate European fuel oil prices in 2024, with relief coming from hitherto less significant exporters a possibility, while bunkering hubs outside Europe might grow in prominence.

18 December 2023

EU states pivoted away from Russia for their high-sulphur fuel oil (HSFO) imports after sanctions started in 2023. Vortexa data show that after 5 February, half of HSFO departures signalling for European ports — excluding those in Turkey — came from the UAE, Saudi Arabia and Iraq. In contrast, across all of 2022, Russia accounted for nearly 80pc of seaborne HSFO deliveries.

Relying on these middle Eastern countries for HSFO and crude oil supplies in 2024 will probably tighten supplies over the summer, as was the case in 2023, when HSFO discounts to Ice Brent crude futures flipped to a premium for the first time in 30 years.

Further establishing flows between newer exporters will be important to European buyers and refiners in 2024. Venezuela, whose oil industry was sanctioned by the US until October, has been touted as a potential supplier of sour crude and fuel oil to the west in the coming months, which could provide some relief to HSFO undersupply in northwest Europe. Likewise, Venezuelan volumes going to the

Mediterranean may incentivise transportation of the product within the region, where HSFO paucity has at times disincentivised refiners from paying rising freight costs to move smaller than desired cargoes.

HSFO demand from non-European countries such as China may also draw the attention of large exporters of sour crude and feedstocks. China recently released a new set of import quotas for foreign HSFO after independent refiners reached their crude import limit.

Demand for imported fuel oil from the Chinese refining sector has approached historic highs this year. But some refinery sources in China reckon the government's tax rebate policy will be adjusted to reduce these flows.

Eastern promises

The market is predicting lower demand for marine fuels, largely consisting of very-low sulphur fuel oil (VLSFO), in Europe across 2024, partly because of the marine sector preparing for its greenhouse gas emissions to be incorporated in the EU's emissions trading scheme (ETS).

From January, the ETS will cover CO2 emitted from all large vessels entering EU ports, with shipping companies in 2025 having to surrender emissions allowances for 40pc of those emissions. In the short run this will push vessels to bunker outside EU waters, as the transition to green marine fuels gets underway.

Bunker fuel demand has generally tapered off towards the end of 2023, leading many suppliers to shift large volumes to Singapore, the world's main bunkering hub. Singaporean demand for bunker fuels generally rallied in the last quarter.

VLSFO stocks have also been moved east out of Europe because of the tightness of supply in Singapore in recent months, a knock-on effect of technical disruption at refineries east of Suez. Producers and suppliers in Europe are keeping a weather eye on the state-owned 615,000 b/d al-Zour refinery in

Kuwait, a potentially huge supplier of VLSFO in the east next year. Al-Zour was hit by many technical disruptions in the latter part of 2023, at one point having to draw operations to a near complete halt.

With a consequently reduced output of VLSFO, producers in Europe have been able to capture margins by selling to Singaporean buyers. In 2024, whether KPC can end problems at al-Zour will play a big part in determining whether the 0.5pc sulphur product continues to flow east, and whether pressure on stocks in Europe will rise or fall.

By Bob Wigin

Photo credit and source: Argus Media
Published: 19 December, 2023

Related Topics:Bunker fuel - HSFO Bunker fuel - VLSFO

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Hong Kong-based Sun Ferry takes delivery of diesel-electric ferry “Xin Ming Zhu 30”

New vessel, designed by Incat Crowther and constructed by Guangzhou-based shipbuilder AFAI Southern Shipyard, will serve inter-island commuter and tourism operations across Hong Kong.

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Hong Kong-based Sun Ferry takes delivery of diesel-electric ferry “Xin Ming Zhu 30”

Global digital shipbuilder Incat Crowther on Wednesday (19 March) said Hong Kong-based ferry operator Sun Ferry has taken delivery of Xin Ming Zhu 30, a new, 35-metre diesel-electric ferry.

The new vessel, designed by Incat Crowther and constructed by Guangzhou-based shipbuilder AFAI Southern Shipyard, is the third vessel to join a fleet of seven new vessels designed by Incat Crowther for the mass transit operator.

The vessel will serve inter-island commuter and tourism operations across Hong Kong, connecting Peng Chau, Mui Wo, Chi Ma Wan and Cheung Chau.

The 300-seat passenger ferry boasts Veth azimuth thrusters that provide high manoeuvrability at operating speeds of 14 knots. The adoption of this technology makes the vessel suitable for berthing at piers on inter island routes.

The vessel is also fitted with 72 solar panels providing 7.5 kilowatts of on-board power.

Sam Mackay, Technical Manager at Incat Crowther, said: "This vessel reflects Sun Ferry’s commitment to future focused design solutions that not only meet operational needs, but that exceed customer expectations.”

“With diesel-electric propulsion, solar technology, and passenger-centric design, it sets a new benchmark for sustainable and efficient ferry services in Hong Kong.”

The delivery of the 35-metre hybrid vessel follows the delivery of two 45-metre conventional diesel-powered vessels to Sun Ferry. The final three vessels, all 45-metre vessels, will be delivered by the end of 2025. All vessels in the fleet have been designed by Incat Crowther and built by AFAI Southern Shipyard.

Photo credit: Incat Crowther
Published: 20 March, 2025

Biofuel

PRIO delivers Eco Bunkers B30 to two cargo ships at ports in Portugal

Company supplied the bio bunker fuel, a product containing 30% renewable raw materials, to “BBC Lisbon” at Port of Aveiro on 3 March and to “ANNA” at Port of Leixões on 18 March.

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PRIO delivers Eco Bunkers B30 to two cargo ships at ports in Portugal

Biofuels producer PRIO on Wednesday (19 March) said it carried out Eco Bunkers B30 fuel deliveries to shipping company Briese Chartering in collaboration with its partner UFS Unites Fuel Services this month.

On 3 March, PRIO supplied the biofuel to cargo vessel BBC Lisbon at the Port of Aveiro and to another cargo vessel, ANNA, at the Port of Leixões on 18 March.

“With these two Eco Bunkers B30 deliveries, a product containing 30% renewable raw materials, PRIO enabled Briese Chartering to reduce around 60 tons of CO2 in just two port calls in Portugal,” it said in a social media post.

“Produced at PRIO’s Aveiro plant, biodiesel has the potential to reduce GHG emissions by approximately 88% compared to fossil fuels.”

“PRIO has been demonstrating its commitment to decarbonising the maritime sector by supplying more sustainable products, ranging from 1% to 100% renewable content.”

Manifold Times previously reported PRIO launching its ECO Bunkers B30 biofuel in partnership with Norwegian Cruise Line Holdings and World Fuel Services.

PRIO previously launched ECO Bunkers B15, a green fuel for ships with 15% biodiesel and the company then launched a 20% biofuel blend, ECO Bunkers E20.

Photo credit: PRIO
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LNG Bunkering

Gasum completes SIMOPS LNG bunkering operation of PCTC “Höegh Sunlight”

Gasum’s LNG bunker vessel “Coralius” made its 920th LNG delivery to “Höegh Sunlight”, a brand new PCTC, with a capacity of 9100 CEU, at the Port of Gothenburg, Sweden on 10 March.

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Gasum completes SIMOPS LNG bunkering operation of PCTC “Höegh Sunlight”

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The company did not specify the amount of LNG supplied to the vessel.

The delivery was a collaboration between Gasum, Glander International, Höegh Autoliners, the Port of Gothenburg and Sirius Agency.

Photo credit: Gasum
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