IMO2020 Grade Fuel's Supply "Uncertain"

Tuesday June 18, 2019

The premium for gasoil over heavy fuel oil could edge towards $400 a metric tonne at the start of next year adding up to $20,000 to ship's fuel bill.

However, it is unclear if there will be enough International Maritime Organisation (IMO) compliant fuel oil available in time to meet the demand, according to Sergey Ivanov, director of the Marine Bunker Exchange (Mabux).

Writing in the June issue of the Bimco Bulletin, Ivanov says that although regular VLSFO deliveries to the global bunker market can be expected in the third quarter, the supply of IMO-compliant fuel from the oil majors is far from certain.

"The quesiton of availability of very low sulfur fuel (vlsfo) is critical at this point," he said.

"No-one is sure that there will be enough VLSFO available in all the main ports in the world.

"Eighteen, 13 or seven ports [Ivanov is referring to ports that oil majors have said they will deliver compliant fuel to] do not make a whole bunker market."

Ivanov concludes that if many shipowners are ready to make the switch to the new requirements, "the bunker market is not".

However, not all observers are so pessimistic. Bunker industry veteran Nigel Draffin has said IMO-compliant fuel will be made available, telling a recent industry event that the fuel would be moved to the ports that needed it.

Delegates at last week's Platts 16th Annual Bunker and Residual Fuel Conference in Houston were also told by several speakers there will be no shortage of product, it was just a case of getting it to the right places.