EMEA News
Changes Looming for Russia's Bunker Markets
Lukoil representative Roman Kovalchuk has told an audience at the Marine Fuels and Lubes' 2014 conference in Moscow that Russian market responses to Emissions Control Area (ECA) rules, tax structures, and western sanctions will lead to changes in Russia's bunker markets in 2015, PortNews reports.
Ship owners are likely to find unpleasant surprises in the Russian bunker markets in 2015, according to the report.
Kovalchuk said the bunker market in Russia's Northwest region, located within the European ECA, will focus next year on selling marine gasoil (MGO) meeting new 0.10 percent sulfur rules.
However, available volumes of compliant fuels are not likely to meet demand, meaning bunker sales in the region could dip.
In addition, Kovalchuk also said western sanctions were disrupting cargo traffic into Russia, pushing bunker sales lower.
And the dynamics of MGO sales are also likely to be impacted by the introduction of excise duties, about which the industry is currently in the dark, according to Kovalchuk.
MGO prices could increase significantly as a result of duties, he said, with a further knock-on effect to bunker sales.
But the picture was balanced to some extent, with gains for the sector elsewhere in Russia.
Some shipping tonnage is expected to switch to the Azov-Black Sea basin as a route into Russia and Kovalchuk expects a "sales influx" there.
He also said Russia will export less heavy fuel oil (HFO) as uptake of bunkering services at Vladivostok in eastern Russia continues to lure customers from Asian bunkering hubs.
Kovalchuk also said at the conference that Lukoil could supply up to 500,000 tonnes of MGO in 2015 and would ramp up production strongly in coming years.
