FEATURE: IMO Reports Show Sharp Drop in VLSFO Shortages

by Jack Jordan, Managing Editor, Ship & Bunker
Monday March 23, 2020

The number of fuel oii non-availability reports (FONARs) filed to the International Maritime Organization declined sharply last month, indicating some of the initial problems with very low sulfur fuel oil (VLSFO) supply may have been resolved.

Just six FONARs were filed to the IMO in February, down from 41 in January.

FONARs are submitted by ships to the flag state where they are registered in the event that they are unable to buy compliant fuels and plan to use non-compliant ones instead.

The IMO's FONAR records are not necessarily comprehensive, as they rely on flag states passing them to the UN body for publication in a timely fashion.

January's Shortages Fading

In January's reports Brazil, India and Sri Lanka stood out as countries appearing to have problems with VLSFO supply, with several reports mentioning them.

A spokesman for Brazilian oil producer Petrobras told Ship & Bunker earlier this month that it was "fully capable" of meeting VLSFO demand in the country; and by February any supply problems that emerged at the start of the year appear to have cleared up, with no FONARs mentioning Brazil last month.

Two reports mentioned not being able to secure VLSFO supply in ports in Mozambique last month, with one suggesting a quality problem may have been behind the shortage.

Of the remaining reports, one mentioned Wake Island in the Pacific -- repeating a FONAR from January that Ship & Bunker reported on earlier this month -- one mentioned Egypt, one Sri Lanka and another ports in Malaysia and Singapore.

The drop in reports could be explained by lower shipping actvity last month because of the COVID-19 outbreak in Asia causing a drop in bunker demand.

Another possible reason could be that shipowners were less keen to test the FONAR system in the run-up to the introduction of the non-compliant fuel carriage ban at the start of March. 

But with bunker demand now down by an estimated 8% because of current disarray in global supply chains, it seems unlikely that VLSFO availability will be a widespread problem for some time to come.