Tolson took over as IBIA chair on April 1. Image Credit: IBIA

Adrian Tolson, the new chair of industry body IBIA, has released a statement analysing the industry's current position in the wake of the Middle East conflict that has upended global energy markets.

Tolson, who took the helm at IBIA at the start of this month as well as remaining founder of consultancy 2050 Marine Energy, praised the industry's resilience in coping with a new array of problems.

"For those operating closest to the conflict, these are deeply concerning times, first and foremost from a safety perspective, but also in terms of potential damage to assets and the financial risks associated with prolonged instability," he said.

"At a global level, however, bunkering activity has continued largely as it does in times of crisis, with calm operational professionalism and limited disruption.

"Supply locations outside the immediate area, particularly across Asia, have remained steady despite early panic."

Margin Spike

Tolson warned the rapid increase in bunker margins seen since the conflict broke out at the end of February may not last indefinitely.

"In the early stages of the conflict, uncertainty drove sharp price increases and short-term availability constraints," he said.

"Crude and refined product markets continue to move unpredictably, and bunker pricing reflects this reality.

"Suppliers have had to manage exceptional levels of price risk, while buyers are understandably questioning some of the pricing and margins seen during the initial stages of the disruption. In some cases, those increases are difficult to justify.

"From an industry perspective, it is important that all parties recognise the pressures faced across the value chain."

Long-Term Impact

But at the same time, he pointed to the current situation having potentially long-term impacts on how the bunker market works.

"What sets the current situation in the Arabian Gulf apart ... is the sense that it represents something more structural," he said.

"The potential for prolonged disruption, coupled with the vulnerability of the Straits of Hormuz, points to a shift in the landscape.

"More than any recent event, this conflict has exposed weaknesses within the global energy structure and, more specifically, within our own supply chain.

"Even if the situation were resolved quickly, the implications will not disappear.

"Concerns around energy security will persist, and there is likely to be an increased focus on diversification, including alternative fuels.

"For the bunker value chain, this means not only immediate disruption, but also longer-term changes in how supply and demand are structured."