Bunker fuel sales at Fujairah likely to be steady in 2019


Marine fuel sales at Fujairah port this year are likely to remain stable from 2018, with the port witnessing a slight improvement last year as competitive prices at the port tempered the impact of a fall in demand brought about by the continued Qatari diplomatic impasse, industry sources said this week.

Bunker fuel sales at Fujairah port were estimated to have reached at least 9 million mt in 2018, rebounding from 2017 when sales plummeted by over 25% from 2016 to around 8 million-9 million mt, according to traders.

Port authorities at Fujairah did not comment on the figures for bunker sales at the time of writing.

“Total sales in 2018 grew perhaps slightly from 2017 but were still pretty stable. Sanctions on Qatar has killed some of the market demand two years ago and that is not coming back,” a trader said.

The diplomatic crisis first erupted in June 2017, when Saudi Arabia, the UAE, Bahrain and Egypt imposed sanctions on Qatar.

The Saudi-led bloc accused Qatar of backing militant groups across the Middle East, and forging ties with regional rival Iran. The allegation was refuted by Qatar.

The bloc imposed restrictions on Qatar covering diplomatic relations, travel and trade, including some restrictions on bunkering at Fujairah.

While the Qatar situation continues to affect sales, traders said that demand also depended on bunker fuel prices at the port compared with those in Singapore.

“Most of the demand here comes from tankers and they can opt to take here or there depending on the price and vessel route,” a trader said.

A bunker supplier said bunker fuel prices at Fujairah had been more competitive compared with other ports such as Singapore in some months, particularly in the second half of 2018, prompting some customers to switch to Fujairah for their marine fuel needs.

The Fujairah/Singapore delivered 380 CST bunker fuel price spread averaged $3.33/mt over the first half of 2018, and averaged $1.59/mt over H2 2018, S&P Global Platts data showed. The spread is currently at minus $16.75/mt.

Supply-side fundamentals in Fujairah are weighing on bunker fuel prices there due to ample availability from countries including Iran, sources said.

“Overall cargo supply is not tight even after Iranian sanctions, cargoes are still flowing in so I don’t think there is going to be any cutoff in terms of supply,” another trader said.


Demand for residual marine fuel oil, or RMG, will mostly dissipate into 2020 but right now it is still the most dominant product for the Fujairah market, industry sources said.

This comes as the global bunker industry including Fujairah inches closer to the International Maritime Organization’s global sulfur limit rule for marine fuels, starting January 1, 2020.

The IMO will cap global sulfur content in marine fuels at 0.5%, down from 3.5% currently. This applies outside the designated emission control areas where the limit is already at 0.1%.

Shipowners will have to switch to more expensive cleaner fuels or use high sulfur fuel oil with scrubbers to comply with this rule.

“Low sulfur marine gasoil continues to have a minuscule share in the market even though we do foresee some uptick,” the first trader said, adding that the move to stricter regulations in international shipping as well as Fujairah’s recent announcement to ban the discharge of wash water in its port waters was likely to underpin this demand.

“You can still take RMG at Fujairah but it’s harder with the open loop scrubber ban,” another trader said.

The Port of Fujairah issued a notice earlier this month banning the use of open-loop scrubbers in its port waters.

Fujairah’s decision to prohibit the use of open loop scrubbers mirrors recent moves by Singapore and China and is intended to protect the marine environment.

In areas where the discharge of wash water is not permitted, vessel operators are more likely to use compliant fuel instead of switching to a closed loop mode of operation, as this would require converting currently installed open loop systems to closed loop or hybrid systems, which would be complex and costly, industry sources said.

Source: Platts



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