VLSFO prices in Panama may be more competitive than those in Ecuador. Image Credit: File Image / Pixabay
The cost of importing very low sulfur fuel oil (VLSFO) may give ports in Panama an advantage over ones in Ecuador, according to price reporting agency Argus Media.
"The exclusive use of imports and no supplies of locally refined LSFO could keep Ecuador's prices for the fuel less competitive compared with the competing port of Balboa, on Panama's Pacific coast."
"The exclusive use of imports and no supplies of locally refined LSFO could keep Ecuador's prices for the fuel less competitive compared with the competing port of Balboa, on Panama's Pacific coast," the agency said Thursday.
"This could shift some of the demand away from Ecuador to Balboa."
It "remains unclear" whether state-owned PetroEcuador will produce VLSFO, Argus said, and the company's current residual fuel oil production has a sulfur content of 1.61-2.30%.
"Panama does not have an operational refinery and is also reliant on oil imports," the agency said.
"But the bulk of the LSFO product to be sold for bunkering in Panama and in Ecuador is expected to be sourced from the Atlantic side of the continent, namely from the US Gulf coast and the Caribbean.
"To reach Ecuador from the Atlantic side the residual fuel oil will be transshipped through Panama, making Panama better positioned to take advantage of import prices compared with Ecuador."