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IBIA: Change in bunkering activity – Red Sea attacks on commercial shipping

Red Sea crisis that developed in Q4 of 2023 has caused some significant and continuing shifts in both global demand patterns and pricing, says Tahra Sergeant of IBIA.

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Tahra Sergeant, International Bunker Industry Association’s (IBIA) Regional Manager of Africa and Global Head of Events, on Monday (1 July) shared on how the Red Sea crisis has reshaped global bunkering demand, particularly in Africa, Singapore, European ports and New York.

The following are excerpts of the article by Sergeant: 

The continued attacks on commercial shipping in the Red Sea have impacted the overall size and patterns of global bunker demand. In simplest terms increased distances travelled and increased speeds have added somewhere between 800,000 and 1,000,000 metric tons per month to global bunker demand. The bunker supply industry has faced two challenges to increase overall supply volumes and to adjust location of bunker supply to reflect differing demand patterns.

Increases in bunkering activity, well outside normal fluctuations, continue to be seen at ports on the African coastline, offshore Africa and Islands close to the Africa Continent. A predictable decrease in bunkering activity has been seen in supply ports of the Eastern Mediterranean. Further significant demand increases are felt at Asian ports (particularly) Singapore, European ports (particularly ARA (Amsterdam, Rotterdam and Antwerp) and Algeciras) and even at New York on the US East Coast.

Overall, the bunker supply industry has been able to both add volume and absorb these shifts in demand although this has not been without its challenges. Ports needed to quickly increase supply with uncertainty over future demand and notably as South Africa market has had to deal with specific localized supply challenges.

This report summarises feedback from various industry sources, focusing on the magnitude of bunker sales, the ability to quantify these changes, supply challenges, and future demand expectations:

Impact on bunker demand:

Africa:

Mauritius (Port Louis): The strategic position of Mauritius makes the island an important bunkering location. Demand for bunkers for most of 2023 was approximately 30,000 metric tons per month which has now increased in Q1 2024 to 60,000 to 65,000 metric tons per month.  

Mozambique: Maputo, Nacala and offshore Mozambique Channel:  Bunker volumes in these locations were limited for most of 2023 but have now anecdotally significantly increased.

South Africa: For the majority of 2023 South African bunker volumes were approximately 130,000 metric tons per month. In the crucial period of Q1 2024 this volume has unfortunately dropped to 80,000 metric tons as explained below.

  • Durban and Richards Bay: Traditionally were significant bunker locations on South African Coast but impacted by local refinery closures.  Limited ability to increase volume.
  • Algoa Bay:  Supplied between 60,000 to 70,000 metric tons per month until Q4 2023 when supply was shut down because of tax and licensing dispute with South African authorities.  This supply location remains inactive and is a major loss for South African bunker supply options.  
  • Cape Town: 2023, limited supply from Astron Refinery.  Demand in 2024 for bunkers supply in Cape Town has increased to approximately 40,000 metric tons per month. With a surplus.

Namibia:  Walvis Bay was a low to medium volume supply location in 2023 with demand reportedly doubling by Q1 2024

West African (WAF) Offshore Supply:  Significant volumes of bunkers are supplied in lightering locations off major West African ports.  These locations are not ideally suited for ships diverting around Africa.  Early 2023 bunker volumes were approximately 210,000 metric tons per month, Q1 2024 closer to 250,000 metric tons.

Europe:

Canary Islands (Spain):  Strategically located off the coast of Africa the Canary Islands has seen bunker demand increase from 315,000 metric tons per month in early 2023 to 370,000 metric tons per month in Q1 2024

Algeciras (Spain):  2023 demand increased from 270,000 metric tons per month to 300,000 metric tons per month in Q1 2024.  However, the western Mediterranean is largely unchanged in demand as ports such as Gibraltar have lost some demand.

Eastern Mediterranean:  Reportedly, demand is down in all locations but limited hard statistical data is available to support this conclusion.  

ARA (Amsterdam, Rotterdam and Antwerp):  Demand has risen from 1.45 million metric tons in 2023 to 1.58 million metric tons in Q1 2024.

North America:

New York: Demand has risen from 350,000 metric tons per month in 2023 to 400,000 metric tons per month in Q1 2024 due to container services usually transiting the Mediterranean not diverting around Africa.

Asia

Singapore: Demand has risen from 4.23 million metric tons per month in 2023 to 4.62 million metric tons per month in Q1 2024.  Singapore has absorbed 40% of the increased demand created by the Red Sea crisis.

Conclusions

The Red Sea crisis that developed in Q4 of 2023 has caused some significant and continuing shifts in both demand patterns and pricing. 

The existing fossil fuel based bunker supply industry and the buyers of bunkers have a well-proven and cooperative ability to adjust to supply and price disruptions whether created by regulation, geopolitical tensions or natural occurrences.

These adjustments are at times challenging and can be damaging or beneficial to different supply locations.

Prices will rise, perhaps to modify over time, but shifts in demand will be recognised and covered. The energy transition within shipping provides potentially more significant challenges in that new lower GHG fuels will at first only be available in limited ports and smaller volumes. Geopolitical disruption may be more challenging to the future bunker supply chain.

Note: The full article by IBIA’s Tahra Sergeant can be found here.

 

Photo credit: International Bunker Industry Association
Published: 5 July, 2024

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Bunker Fuel

Singapore confirms bunker spill from damaged shore fuel hose at Brani Regional Base

Authorities said about 23 metric tonnes had leaked from a damaged shore fuel hose used to refuel patrol craft at Selat Sengkir and no oil slicks observed.

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Singapore authorities on Thursday (6 February) confirmed that a diesel oil leak was discovered at the Police Coast Guard (PCG) Brani Regional Base on 5 February, at around 11.40am (Singapore Time). 

The leak was eventually isolated at about 3.40pm. 

“About 23 metric tonnes had leaked from a damaged shore fuel hose used to refuel patrol craft at Selat Sengkir,” said Singapore Police Force, Maritime and Port Authority (MPA) and National Environment Agency (NEA) in a joint statement. 

PCG and the Maritime and Port Authority of Singapore have deployed patrol craft and spill response resources to clean up small patches of light oil sheens observed in our southern waters. 

Contractors have also been activated to support the operation. There are no oil slicks observed. 

Navigational traffic in the area is not affected. There is no impact to operations in the Port of Singapore.

 

Photo credit: Manifold Times
Published: 7 February, 2025

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LNG Bunkering

LNG bunkering at Port of Barcelona increases by 60.5% on year in 2024

Port said 229,750 cubic metre of LNG were supplied at the port in 2024, achieving an increase of 60.5% compared to 2023 and a total of 491 LNG bunkering operations were carried out at the port.

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LNG bunkering at Port of Barcelona increases by 60.5% on year in 2024

The Port of Barcelona on Wednesday (5 February) said 229,750 cubic metre (m³) of LNG were supplied at the port in 2024, achieving an increase of 60.5% compared to 2023.

The Port said the achievement placed Barcelona as the leading port in the state - with 40% of the total m³ of LNG supplied - and one of the first in Europe in LNG bunkering. 

In 2024, a total of 491 LNG bunkering operations were carried out for ships, of which 402 were via tankers trucks, with 45,427 m³ supplied, and 89 were ship-to-ship (STS) transfers from barges, with 184,324 m³ delivered. 

Of the 8,398 ship calls at the Port of Barcelona during 2024, 822 calls were from ships using LNG, about 10% of the total calls at the port.  

The ships that have received LNG bunker fuel in Barcelona have been mainly cruises and ferries, reaching close to 23% and 19% of the calls of both types of ships and contributing to a reduction in nitrogen oxide (NOx) emissions of 20% for cruises and 18% for ferries. 

The top cruise companies have incorporated LNG-powered ships into their fleets, a good number of which operate regularly in Barcelona. During 2024, a total of 1,664,712 cruise passengers (45.5%) passed through Barcelona on board an LNG-powered cruise ship.

The increase in bunker supply of 60.5% has been possible due to several factors: 

  • the presence of the LNG supply barge based in the Haugesund port Knutsen, from the company Knutsen-Scale Gas,
  • the commitment of the shipping company Baleària to LNG, provided by several tanker trucks at the same time,
  • and the incorporation of new types of ships that use LNG in the port, notably car carriers. The Lake Herman ship, from Japanese shipping company MOL, was the first vehicle carrier to carry out LNG bunkering at the Port of Barcelona, ​​followed by four more ships of the same service, to which two new ships have been added at the beginning of 2025. 

During 2024, the fast ferry Margarita Salas, powered by dual LNG engines, was also added. Operated by Baleària, this ship began operating last June, connecting Barcelona with Mallorca and Menorca at high speed. This new connection reinforces the commitment to integrating LNG into passenger transport and significantly reduces the emissions generated on this route.

The Port of Barcelona said it will continue to facilitate the introduction of LNG with measures such as administrative simplification to facilitate the authorisation of LNG bunkering operations; and the availability of generic risk analyses to be able to expand these operations to other types of ships. 

During 2025, new risk analyses will be carried out to allow the supply of LNG to container ships, for which the port has already received interest from supply operators.

 

Photo credit: Port of Barcelona
Published: 7 February, 2025

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Shipping Corridor

Clear plan developed for Stockholm-Turku green shipping corridor

After a year of cooperation, Viking Line, Port of Turku and Ports of Stockholm said they have now laid a solid foundation for the green corridor project and developed a clear plan for a common way forward.

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Clear plan developed for Stockholm-Turku green shipping corridor

Viking Line, Port of Turku and Ports of Stockholm on Thursday (6 February) said they have now laid a solid foundation for a green shipping corridor project and developed a clear plan for a common way forward.

This comes after working together for a year on the project which aims to establish a green, fossil-free shipping corridor between Stockholm and Turku. 

On the anniversary on 6 February, the parties and a large number of invited stakeholders gathered for an open seminar in Turku, Finland. Results, experiences, challenges and opportunities were discussed based on the common goal of establishing a green maritime corridor between Stockholm and Turku by 2035.

Magdalena Bosson, CEO Ports of Stockholm, said: “We are very pleased with the cooperation and the work done during the first year.”

“We have been investing in onshore power supply infrastructure for ships for many years and Viking Line is one of the pioneers. Now we are further sharpening our goals together with the other parties to establish a fossil-free shipping corridor between Stockholm and Turku.”

Jan Hanses, CEO Viking Line, said: “We are proud to be part of this important co-operation project for a cleaner Baltic Sea. Our most significant investment so far is to offer all our passengers and freight customers biofuel for transport between Stockholm and Turku, reducing emissions for their journeys by 90%.”

“In addition, a possible battery installation and Elogrids, which reduces energy consumption, are important elements of our work in the coming years.”

Elogrids is a grid system installed on the ship's hull to reduce resistance and improve fuel efficiency. It optimises water flow and reduces turbulence, resulting in lower energy consumption.

Erik Söderholm, CEO Port of Turku, said: “A green shipping corridor gives us the opportunity to promote sustainable development and reduce the environmental impact of shipping.”

“During the past year, we have started more detailed planning of measures related to the green shipping corridor, such as updating our carbon footprint calculation and preparing for the development of charging stations for heavy traffic.”

During the first year, the parties have identified and prioritised the most important goals and measures to reduce carbon dioxide emissions in shipping. 

A clear project plan with activities has been developed, including:

Viking Line

  • Pre-study of battery installation on Viking Grace and Viking Glory
  • Installing Elogrids on the vessels
  • Increase sales of biogas supplements for transport between Stockholm and Turku

Port of Turku

  • Study and pilot project for onshore power supply at the quay
  • Zero emissions from Viking Line vessels at berth
  • Guidelines and incentives for port operators for zero emissions
  • In collaboration with external actors, develop concepts that link the green shipping corridor with sustainable transport from and to the port on land
  • Opportunity for shipping companies to bunker sustainable fuels

Ports of Stockholm

  • Zero emissions from Viking Line vessels at the quayside
  • In collaboration with external actors, develop concepts that link the green shipping corridor with sustainable transport from and to the port on land
  • Opportunity for shipping companies to bunker fossil-free fuels

 

Photo credit: Ports of Stockholm
Published: 7 February, 2025

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