Overview

Demand at key marine fuel hubs slipped on both a yearly and quarterly basis in the second quarter of 2022, according to the latest market survey of bunker sales volumes in 17 leading global locations, as the Ukraine crisis left markets in turmoil.

As in previous quarters, Ship & Bunker and consultancy BLUE Insight surveyed bunker market participants around the world alongside official data where available and found an average drop of 4.2% in volumes in the second quarter from the same period of 2021. The year-on-year decline compares with a 2.6% year-on-year drop in the first quarter of 2022. Q2 volumes sequentially were 1.8% lower than in Q1 2022.

"Q1 global bunker demand was largely unaffected by the Russian invasion of Ukraine," says Adrian Tolson, head of BLUE Insight.

"Q2 evidences some obvious impacts with significant demand loss in both Russian ports and Turkey.

"Globally the major container ports showed volume resilience, reflecting the highly profitable container industry in the same quarter.

"Shifts and changes in shipping routes and supply chains helped increase activity in the traditional bottleneck ports of Panama and Gibraltar."

Russia Impact

The Russia-Ukraine crisis remained the biggest factor overturning the global bunker industry in the second quarter.

Russian sales were down significantly over the year, though had stabilised on a quarterly basis. But the knock-on effects were seen much more widely, with the Turkish market in particular facing a downturn as shipping activity in the Black Sea dropped.

While oil exports from Russia are largely continuing, the tankers carrying these products tend to bunker at Russian ports.

Elsewhere in the world, with much of the West seeking to phase out Russian oil imports, exports from other countries are now travelling further to make up the deficit, boosting tanker demand and helping bunker sales at ports where tankers are a prominent part of the market.

Away from the Russia crisis, in the second quarter Singapore was dealing with the fallout from its contamination problems in February and March, with Q2 HSFO sales particularly affected.

Prices

The situation in Ukraine drove global bunker prices to record highs in the second quarter. Ship & Bunker's G20 Index of VLSFO prices at 20 leading bunkering ports reached its all-time high of $1,120.50/mt on June 9.

The VLSFO index averaged $983/mt in Q2, up by 88.1% on the year.

That rise in prices should drive healthy profit margins for the bunker industry, but will also tighten the availability of the credit that the industry relies upon.

A spokesman for global marine fuels supplier and trading firm Monjasa said its performance had remained healthy in the second quarter.

"During Q2 2022, the combination of historically strong shipping markets, extreme price volatility and trade flow disruptions due to Russia's war in Ukraine affected the marine fuels industry significantly," the representative told Ship & Bunker.

"At Monjasa, we experienced high activity levels and increasing volumes across our global trading activities and physical supply operations."

US-listed World Fuel Services, the world's second-largest bunkering firm by volumes, saw its bunker margins surge to the highest level since at least 2014 in the second quarter.

"These volatile market pricing dynamics drove our spot-oriented marine business through record results," Ira Birns, chief financial officer at WFS, said in a call with analysts discussing the firm's Q2 results.

"As evidenced in the past and then again during this past quarter, during times of elevated fuel prices, constrained credit and rising interest rates, we become a more critically valued counterparty, which increases our success rate and contributes to profitable volume growth."

Methodology

The areas covered by the survey are Singapore, the Amsterdam-Rotterdam-Antwerp (ARA) hub, Fujairah, the US Gulf, South Korea, Russia, the Gibraltar Strait, Hong Kong, Panama, Zhoushan, Japan, New York, West Africa, South Africa, the Canary Islands, Los Angeles/Long Beach and Turkey. Data is sourced from a combination of market participants and official records.

Together these areas saw about 139 million mt of demand in 2021, meaning they cover more than 60% of current global demand.

Only conventional bunker sales are noted by this survey, with LNG, biofuels and other alternatives currently excluded.

Individual Market Volumes & Commentary

Singapore

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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ARA 

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Gibraltar Strait

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Fujairah

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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US Gulf

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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South Korea

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Russia

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Hong Kong

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Panama

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Zhoushan

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Japan

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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New York

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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LA/Long Beach

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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West Africa

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Canary Islands

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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Turkey

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

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South Africa

• Q2 2022 XXX million mt
• Q2 2021 XXX million mt
• Q1 2022 XXX million mt
• Year-on-year change XXX%
• Quarter-on-quarter change XXX%

Individual market commentaries are only available to subscribers. Click here to learn more and get instant access from just $59. Existing subscribers can sign in here.