OW Bunker: Changing U.S. Market Gives New Opportunities in U.S. for Bunker Suppliers

by Ship & Bunker News Team
Friday June 20, 2014

Changing dynamics in the U.S., including domestic energy production, the widening of the Panama Canal, and new sulfur limits in the North American Emissions Control Area (ECA), offer new opportunities for bunker suppliers, Adrian Tolson, North America general manager for OW Bunker, writes in the latest edition of industry magazine Maritime Reporter & Engineering News.

While the U.S. is moving toward energy independence thanks to the extraction of oil and gas from shale, Tolson writes that Gulf Coast refineries are not likely to invest in producing fuel oil since shale oils are relatively light and produce less of the residual fuel.

"For shipping, this raises important questions about the future supply and demand balance of required fuels and what this means for ensuring compliance when the ECA sulphur emissions limit drops to 0.1% in January 2015," Tolson wrote.

"Fuel distributors must be cognizant of these market changes and need to work closely with their customers to implement an effective plan that determines their fuel requirements both in North American waters and internationally, and source quality products accordingly."

The widening of the Panama Canal could mean increased demand for fuel at U.S. East Coast ports where harbours are being expanded to accommodate post-Panamax vessels

"Fuel distributors here may benefit from the increase in feeder traffic from the larger vessels at both sides of the canal as well as those operating from ports that have invested in dredging and expanding berths to cater to larger vessels," Tolson wrote.

"The West Coast bunker market, in comparison, will have to adjust and create a competitive offering to maintain traffic, which is of course beneficial to customers."

Bunker suppliers must also respond to the pressure that high fuel costs put on vessel operators, supporting their customers in achieving operational efficiencies.

For example, Tolson wrote, OW Bunker established an offshore physical distribution operation in the Gulf of Mexico designed to increase efficiency all along the fuel supply chain.

OW bunker is now expanding its resale and physical distribution operations in North America, with new ships, offices and personnel.

"It is through this determination to evolve that we can be on hand to help ship owners and operators manage this transition and thrive in the face of change," Tolson wrote.

OW Bunker began providing a physical supply in the Gulf of Mexico in 2012 and launched a U.S. West Coast physical operation this spring.