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Bunker Fuel

Gibson report: Mediterranean ECA to impact bunker prices and tanker trade

Current bunker demand in the Mediterranean is estimated at around 21.5 million tonnes, with >50% consisting of 0.5% VLSFO but demand for VLSFO in the region is expected to fall once ECA is in effect.

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E.A. Gibson Shipbrokers Ltd (Gibson) recently released a Tanker Market report on the impact of Mediterranean Sea becoming an emissions control area (ECA) next May on tanker trades: 

The shipping markets are no stranger to emissions control areas (ECAs), following the establishment of ECAs in the United States, Baltic and Northern Europe. From the 1st of May 2025, the entire Mediterranean Sea will become an ECA, with the maximum sulphur content of fuel burned on board falling from 0.5% to 0.1%, unless fitted with an exhaust gas cleaning system (scrubber) capable of reducing stack emissions to this level. 

Following previous ECA introductions and IMO2020, refineries and bunker suppliers have shown they can adapt to the necessary changes in demand, however, there will be implications, both in terms of bunker prices and commodity flows in and out of the region.

Current bunker demand in the Mediterranean is estimated at around 21.5 million tonnes, with >50% consisting of 0.5% VLSFO. Come May next year, demand for VLSFO in the region is expected to fall, with ships that do stem the grade doing so to burn once outside the ECA. 

According to data from Marine and Energy Consulting Ltd, demand for VLSFO could fall to around 6 million tonnes/year, shifting to 0.1% MGO and ULSFO. In theory, HSFO demand should remain steady as ships fitted with scrubbers continue to burn high sulphur grades. However, with some scrubber systems unable to “scrub down” HSFO to 0.1%, it remains to be seen how many Owners will be forced to switch to other grades.

Ships trading in the region will therefore face higher costs, unless they are using a scrubber. For the year to date in Gibraltar, 0.1% MGO has averaged $798/tonne vs. $590/tonne for VLSFO (+35%) which should translate into higher freight rates, and for tankers, likely higher Worldscale flat rates in due course.

The ECA also has implications for the flow of refined products within, in and out of the region. A decline in demand for VLSFO is inevitable, which should facilitate export arbitrages from the region, most likely to East of Suez. At the same time, the Mediterranean should see its structural deficit of gasoil increase, with cargoes being imported from the US and Middle East. Trading of compliant grades across the region should also get a boost, at the expense of movements of VLSFO cargoes.

Overall, this suggests a modest shift from dirty to clean tankers for regional moves, although larger dirty tankers are likely to see some benefit from exporting surplus fuel oil to Asia. Bunker demand in the region will also be impacted (albeit to a lesser degree) by the upcoming FuelEU legislation which mandates a 2% reduction in the greenhouse gas intensity (GHG) from 1st of January 2025. Whilst the initial impact will be small, some demand will be shifted from conventional bunker fuels to greener alternatives.

The full Tanker Market Report can be found here. 

 

Photo credit: Shaah Shahidh on Unsplash
Published 17 October 2024

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LNG Bunkering

PIL’s LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on LNG and low-sulphur fuel oil that helps reduce our greenhouse gas emissions.

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July 21, 2026

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PIL's LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

Singapore-based Pacific International Lines Pte Ltd on Monday (20 July) said its first 13,000 TEU LNG dual-fuel container vessel, Kota Elok, recently made her maiden call to Singapore on 15 July.

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on liquefied natural gas (LNG) and low-sulphur fuel oil that helps reduce our greenhouse gas emissions. 

The vessel also incorporated energy-saving features and digital technologies to reduce fuel consumption and enhance operational performance, as well as a bow windshield to improve aerodynamics, contributing to improved fuel efficiency and lower emissions over the course of long-haul voyages.

“Following Singapore, Kota Elok will continue her voyage on our East Coast Service 1 (ES1) route to South America, calling at ports in Brazil, Uruguay, and Argentina before returning to Asia,” the company said in a social media post. 

Kota Elok also became PIL’s first vessel to receive Lloyd’s Register certification for compliance with the IACS UR E26 and UR E27 cyber security requirements.

Developed by the International Association of Classification Societies (IACS), UR E26 and UR E27 are mandatory cyber resilience requirements for newbuild vessels contracted from 1 July 2024. 

 

Photo credit: Pacific International Lines
Published: 21 July, 2026

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LNG Bunkering

CIMC SOE secures order for 12,000-cbm LNG bunkering vessel from Sinopec Clean Energy

Once operational, the vessel is expected to strengthen Sinopec’s domestic coastal LNG bunkering network and help address gaps in China’s alternative fuel bunkering infrastructure.
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CIMC SOE secures order for 12,000-cbm LNG bunkering vessel from Sinopec Clean Energy

China’s Nantong CIMC Sinopacific Offshore & Engineering Co., Ltd. (CIMC SOE) recently signed a contract with Sinopec (Beijing) Clean Energy Co., Ltd. to build a 12,000-cubic metre (m3) LNG bunkering vessel, according to Chinese maritime media.

The vessel is scheduled for delivery in 2028 and will support Sinopec’s efforts to expand its presence in the marine clean energy sector.

Once operational, the vessel is expected to strengthen Sinopec’s domestic coastal LNG bunkering network and help address gaps in China’s LNG bunkering infrastructure.

With this signing , CIMC Pacific Offshore Engineering’s LNG bunkering vessel orderbook is further strengthened, maintaining its leading position in the global market for small and medium-sized LNG bunkering vessels.

The contract also marked another milestone for CIMC SOE, which has seen a sharp increase in orders and business performance this year amid a surge in domestic LNG vessel demand.

 

Photo credit: Nantong CIMC Sinopacific Offshore & Engineering
Published: 21 July, 2026

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Nuclear

ABS awards AiP to Korean institute for SMR-powered container ship concept design

KRISO says AiP recognises the technical feasibility and safety of its concept design, marking an important milestone toward the development of next-generation nuclear-powered commercial ships.
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ABS awards AiP to Korean institute for SMR-powered container ship concept design

Korea Research Institute of Ships & Ocean Engineering (KRISO) on Thursday (16 July) received Approval in Principle (AiP) from the American Bureau of Shipping (ABS) for its concept design of a 15,000 TEU Small Modular Reactor (SMR)-powered container ship utilising Molten Salt Reactor (MSR) technology.

KRISO said the AiP recognises the technical feasibility and safety of its concept design, marking an important milestone toward the development of next-generation nuclear-powered commercial ships.

“This achievement demonstrates international recognition of KRISO’s technological capabilities in the rapidly evolving field of nuclear-powered shipping, supporting the transition toward low-carbon maritime transport,” it said. 

Building on this milestone, KRISO will continue advancing basic and detailed ship design, paving the way for future demonstration and commercialisation of SMR-powered vessels. 

Through continued R&D and international collaboration, KRISO remains committed to strengthening next-generation maritime technologies and contributing to the safe deployment of nuclear propulsion in the maritime industry.

 

Photo credit: Korea Research Institute of Ships & Ocean Engineering
Published: 21 July, 2026

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