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‘Limited impact’ from WTI crude oil price drop on Singapore bunkering market, say players

Bunkering sector to enter downward correction of fuel prices on Tuesday due to negative value from sensation of WTI prices, forecasts Director & Founder of Azure Strategic Resources.

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The 300% price drop in the West Texas intermediate (WTI) contract price for May, from USD 17.85 a barrel to minus USD 37.63 on Monday night (Singapore time), will not significantly impact the overall Singapore bunkering market, learned Manifold Times.

The Singapore bunkering publication spoke with a variety of local marine fuel consultants, traders and suppliers on Tuesday to confirm the development; they provided the reason for the historical fall in WTI oil prices, while explaining its limited impact on the sector.

Azure Strategic Resources

“Nobody has seen it [a negative WTI price] before, and everybody gets excited,” said Dennis Ho, Director & Founder of Azure Strategic Resources, a boutique consultancy firm advising mainly on commercial aspects of the marine fuels sector.

Ho explained the main reason for the price drop on the WTI benchmark was mainly due to a flurry of sellers looking to close the May WTI contract expiring on Tuesday (21 April) before delivery.

“A lot of players were taking financial contracts through ETF [exchange-traded funds] for the May contract and when the price dropped they started panicking to clear their position. The new frontline contract for WTI in June is trading at around USD 21 per barrel and will be a better indicator of market value.

“However, if one takes things into perspective the situation is an indication of a near term problem of physical U.S. based players running out of storage as even when the WTI price is negative they cannot take on additional oil in the near term.”

According to Ho, the bunkering sector will be expecting a downward correction of bunker prices on Tuesday (21 April) due to the negative value coming from the sensation of the WTI prices and lower value of Brent crude, a global benchmark for oil prices mainly referenced by players from the fuel oil and bunkering sector [instead of the US-centric WTI].

“However, the overall concern for bunkers is still the ongoing unfortunate issues surrounding Hin Leong Trading. This will negatively impact the availability of credit for the bunkering market and is a bigger concern which most players are focusing on,” he states.

“With the COVID-19 pandemic, oil prices crashing, Hin Leong issues and credit tightening, we are all right in the middle of a perfect storm and not getting out anytime soon.”

SDE International

“Physical bunker players that may have already purchase fuel or already have them in stock will definitely be affected by the fall in the oil prices,” said Simon Neo, Executive Director at SDE International which focuses on consultancy work related to the marine fuels sector.

“They may have to sell at a loss unless they are able to hold it till the oil prices goes up again; but nobody knows given the current market conditions. If suppliers hold stocks, are they willing to sell at these kind of low oil prices?

“But what most players will be concerned in today’s market is the credit crunch due to the banks’ confidence level [with the bunkering sector]. This is something which will hit the bunker suppliers more than the oil price. Even if the oil price is low, banks may not finance a deal. So, we will have to wait and see how the whole situation pans out.”

Feedback from Bunker Traders

The fall in WTI benchmark oil prices will result in limited direct disruption to Singapore’s marine fuel trading operations due to the majority trading on Brent, said traders. However, the group was wary of being indirectly affected by developments from other related sectors.

“My side isn’t expecting any drastic changes as the Singapore marine fuels market trades bunker cargo on Brent and few people look at WTI for prices. Cargo wise, Brent is much more internationally recognised,” said the Director of a Singapore-based bunker trading firm.

“In a nutshell, there is not much effect for the trading side.”

The Marine Fuels Trading Manager of a foreign based oil commodity firm believed the fall in WTI benchmark oil prices could potentially affect bunker trading houses in two ways.

“The fall of the crude oil prices affects the price of bunkers directly. Hence, the cost of bunkers is much lower now, which means our credit exposure to our clients are also reduced, which is a good thing,” he told Manifold Times in an email statement.

“However, the fall in bunker prices could mean some physical suppliers may get caught out by it and face significant losses. We have to monitor all our suppliers closely on any red flags that show them to be facing financial difficulties.”

“The Singapore bunker market is aligned more to movement on the Brent oil benchmark. So, although the WTI dropped drastically, there wasn’t drastic movement in today’s local market,” shared a Senior Trader.

“Singapore remains one of the most competitive ports in Asia. Hence, price competitiveness is a key driver to generate demand, and demand for Singapore bunkers hasn’t really dampen with the COVID-19 issues as MPA recorded steady results [from March bunker sales].

“But with various ports that have excess oil and limited inventory storage, we could potentially see depressed bunker prices which will likely pose more competition to Singapore’s current bunker prices.”

A bunker trading source at an oil major offered a view of the current situation.

“Overall market sentiments remain bearish. We are witnessing demand destruction of an unprecedented scale with planes grounded and countries on lock down. These low absolute oil prices could see banks/lenders making margin calls,” said the source.

“Immediate near-term concerns would be the potential of another set of credit crunch leading to more defaults in an already troubled market.”

The development, overall, is generally good for the bunker trading sector but speaks otherwise of the situation at large, says the Director of a bunker trading firm.

“The fall in oil prices, though for not very good reasons, produces positive effects for the bunker trading business,” he says.

“Customers pay lesser for oil; cash flow for traders will be better as we can now utilise much more than before; and credit lines exposed to clients are less.

“However, it is not surprising that some bunker suppliers have taken positions and now will need to pay margin calls to banks. If you have 50kt of inventory and you have haven’t hedged it correctly, you are screwed.”

Viewpoint from Singapore Bunker Suppliers

Local bunker suppliers generally echoed sentiments of their bunker trading peers, but additionally suggested players involved in storage operations could be negatively affected by the fall in WTI benchmark oil prices.

“WTI dropped a lot due to players having to take physical delivery of stock prior to contract expiry,” the Director of a Singapore-based bunkering firm told Manifold Times.

“Whereas, the fuel oil market in Singapore is more correlated to the Brent index. In addition, we are not affected by the expiry date. Hence, there are limitations to the effects in the bunker market by the fall in WTI oil prices.”

A management level executive at another Singapore bunker supplier believed the fall in WTI prices will unlikely affect players who have not yet taken positions in the market.

“To some extent, the issue boils down to two types of bunker suppliers in the Singapore market; entities who actually take a position and firms who don’t,” he explained.

“Players who have bought and stored cargoes on their floaters or shore storages at an earlier date will be affected.

“The bulk of bunker suppliers in Singapore are the smaller ones who don’t take position and simply buy ex-wharf, and will not face much impact due to the time difference. In fact, the decrease in prices may offer a good position for me as I can buy and supply more with the existing credit line.”

The owner of a bunker supplier whose business predominantly focuses on providing barging services for oil majors says this is the first time he has encountered negative oil prices.

“I don’t think anyone can really predict how it’s going to pan out. It’s also unclear if this was related to the closing of some contracts by the end of the month or if this is going to be a prolonged situation,” he shared.

“There will be a lot more pressure on OPEC+ countries to reach a clear and aggressive agreement to limit production. And moving forward, those who gambled in the past month or two are in for a bumpy ride.”

 

Photo credit: Manifold Times
Published: 21 April, 2020

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Methanol

China: Chimbusco completes bunkering op with domestically produced green methanol

Chimbusco delivered 1,000 mt of domestically produced green methanol bunker fuel to “COSCO Shipping Yangpu”, China’s first 16,000 TEU methanol dual-fuel container ship, from 11 to 12 July.

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China: Chimbusco completes bunkering op with domestically produced green methanol

China Marine Bunker (PetroChina) Co Ltd (Chimbusco) on Monday (14 July) said it successfully completed a green methanol bunkering operation for COSCO Shipping’s first methanol-dual-fuel container vessel at Shengdong Terminal in Yangshan Port. 

Chimbusco delivered 1,000 metric tonnes (mt) of domestically produced green methanol fuel to COSCO Shipping Yangpu from 11 to 12 July. 

COSCO Shipping Yangpu is the first methanol-dual-fuel container vessel invested and built by COSCO Shipping Group. The company previously deemed the vessel China’s first 16,000 TEU methanol dual-fuel container ship. 

 With an overall length of 366 meters and a beam of 51 metres, it has a maximum container capacity of 16,136 TEUs. 

The vessel employs an advanced dual-fuel propulsion system that enables flexible switching between methanol and traditional fuels. When using green methanol as fuel, it significantly reduces carbon emissions and pollutant discharges during operations, injecting strong impetus into the green transformation of China’s shipping industry.

“This green methanol bunkering operation, jointly completed by COSCO Shipping Lines, CHIMBUSCO, and SIPG Energy Shanghai, represents another proactive exploration by CHIMBUSCO in the field of green methanol bunkering at Shanghai Port,” Chimbusco said.

“It also marks another significant step by COSCO Shipping Group in advancing the green and low-carbon transformation of the shipping industry and integrating the entire methanol supply chain.”

“As a leading domestic marine fuel supplier, CHIMBUSCO actively responded to shipowners’ demand for green methanol bunkering and worked closely with COSCO Shipping Lines, SIPG Energy Shanghai and other entities to develop a detailed supply plan and emergency response plan in advance, in accordance with relevant bunkering standards for marine methanol fuel.”

Manifold Times previously reported Chimbusco completing a methanol bunkering operation of the same vessel in Shanghai on 11 May. 

COSCO SHIPPING YANGPU was supplied approximately 900 mt of methanol marine fuel by Chimbusco at Pier 1 of COSCO Shipping Heavy Industry. 

Related: Chimbusco completes bunkering op of China’s first 16,000K TEU methanol DF boxship
Related: COSCO Shipping names China’s first 16,000 TEU methanol dual-fuel container ship

 

Photo credit: Chimbusco Dalian
Published: 17 July 2025

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Methanol

Shanghai Electric starts producing first batch green methanol bunker fuel with new plant

New batch of green methanol will soon arrive at Shanghai Port and be delivered to CMA CGM to enter the international market as a marine fuel.

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Shanghai Electric starts producing first batch green methanol bunker fuel with new plant

Shanghai Electric on Thursday (17 July) announced its Jilin Taonan Green Methanol Project, China’s first facility to fully integrate wind-to-hydrogen with biomass gasification, is now producing its first batch of ISCC-EU certified green methanol.

This batch of green methanol will soon arrive at Shanghai Port and be delivered to CMA CGM to enter the international market as a marine fuel.

The company said the milestone event marked a major national breakthrough in the field of green hydrogen-based fuels. 

Shanghai Electric will use this project as a catalyst to build a world-leading, full-industry-chain platform for green fuels, to accelerate the development of an integrated industrial ecosystem encompassing green energy, green hydrogen, green methanol and green applications.

The company will continuously improve new energy power generation, water electrolysis for hydrogen production, biomass gasification, carbon capture, green ammonia, and to promote the large-scale application of green fuels in shipping, aviation, chemical industry and other fields.

At a ceremony, Cai Dong, member of the Standing Committee of the Jilin Provincial Party Committee and Executive Vice Governor, launched the start of production of the fuel. 

As the first large-scale commercial green methanol project in China, the Taonan project has an annual production capacity of 50,000 metric tonnes in the first phase.

“It is the first green methanol project in China to pass the EU ISCC full-process certification and to market to the international market,” the company said. 

 

Photo credit: Shanghai Electric
Published: 17 July 2025

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Business

Singapore-based Seatrium secures USD 400 mil sustainability-linked revolving credit facility

Credit facility will significantly contribute to Seatrium’s long-term goals of achieving its ESG targets, further bolstering its commitment to sustainable development in the offshore, marine and energy sector.

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RESIZED scott graham

Singapore-headquartered marine engineering firm Seatrium on Tuesday (15 July) said its wholly-owned subsidiary Seatrium Financial Services Pte. Ltd. (SFS) has successfully secured a USD 400 million sustainability-linked revolving credit facility with United Overseas Bank (UOB).

This credit facility, anchored in sustainability-linked principles, aligns with Seatrium’s Sustainable Finance Framework and includes revolving credit features which will strongly enhance the Group’s liquidity and financial flexibility. It will significantly contribute to Seatrium’s long-term goals of achieving its Environmental, Social, and Governance (ESG) targets, further bolstering its commitment to sustainable development in the offshore, marine and energy sector.

Dr Stephen Lu, Seatrium’s Chief Financial Officer, said, “Our continued partnership with UOB marks an important milestone in advancing our financial agility and deepening our commitment to environmental stewardship. By linking our financing framework to clearly defined sustainability targets, we are not only reinforcing accountability but also embedding climate-conscious principles into our capital strategy. This alignment will actively support our decarbonisation goals and longterm value creation.”

Ms Cindy Kong, Managing Director of Group Corporate Banking at UOB, said: “As the global energy transformation accelerates, sustainability-linked financing is playing a crucial role in driving the shift toward decarbonisation. We are proud to partner Seatrium in championing forward-looking initiatives within the global renewable energy segment. Together, we aim to foster innovation while paving the way for responsible and sustainable business growth globally.”

Since 2023, Seatrium has successfully secured over SGD 3 billion in sustainability-linked loans and green financing, further establishing itself as a global provider of sustainable engineering solutions for the offshore, marine, and energy sectors. 

“The Group is steadfast in its commitment to fulfilling its Sustainability Vision 2030, which is centred on empowering clients to minimise their carbon footprints through energy-efficient and environmentally sustainable vessels and offshore platforms.”

 

Photo credit: Scott Graham
Published: 17 July 2025

 

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