Consultant Sees HSFO Cheaply Available in Fewer Than 20 Ports Worldwide

by Ship & Bunker News Team
Thursday March 19, 2020

Bunker industry consultant and new IBIA board member Adrian Tolson sees a greatly reduced number of ports now offering high-sulfur fuel oil (HSFO), according to price reporting agency S&P Global Platts.

The combination of sanctions on Venezuela and Iran with refiners adjusting crude slates towards producing low-sulfur fuels has reduced HSFO supply, Platts cited Tolson as saying Wednesday.

Tolson is director of consultancy BLUE Insight, and was elected to the IBIA board last month.

"I think HSFO remains cheap and easily available in probably less than 20 ports worldwide," Platts cited Tolson as saying.

"If you are thinking of installing a scrubber, you had better be calling at one or more of these ports."

Scrubber installations looked highly profitable at the start of 2020, with a price spread between HSFO and very low sulfur fuel oil as high as $297.50/mt at Rotterdam on January 3.

But this spread -- representing the cost advantage of running a scrubber and being able to continue burning cheaper HSFO -- has narrowed significantly during this month's collapse in the crude market, dropping to a record low of just $51.50/mt at the Dutch hub on Wednesday.

A spread that low will still leave scrubber installations earning back their cost over time, but the payback time will be significantly lengthened.

Ship & Bunker News Team
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