More than 30 oil tankers have anchored in the Malacca Strait off Singapore and Malaysia, according to Kpler, as traders stockpile fuel ahead of the biggest shake-up to the shipping industry in a generation.
The flotilla has been expanding for months as traders amass supplies of fuel that comply with new shipping standards — known as IMO 2020 — that take effect January 1. In April, Kpler estimated that at least five vessels laden with low-sulfur fuel oil and blending components were sitting off Singapore, one of the world’s busiest ship re-fueling ports.
IMO 2020 rules require ships to be powered by cleaner-burning fuel with less than 0.5% sulfur, compared with current industry norms of over 3%. Traders and bunker oil suppliers have been scrambling to secure fuels that can meet the new specifications, or create a blend comprising oil such as gasoil, low-sulfur fuel oil, low-sulfur crude oil, high-sulfur fuel oil and other components.
Crude oil grades such as Australia’s Pyrenees, Vincent, Stag and Barrow Island, Brazil’s Atlanta and Ostra Blend, Congo’s Emeraude Blend, North Sea’s Clair and Thailand’s Wassana are also being hoarded on tankers in the Strait, according to data-intelligence firm Kpler.
Almost 4.5 million tonnes of fuels that comply with IMO 2020 were floating off the Malaysian ports of Tanjung Pelepas and Sunggai Linggi as of October 16, making up three-quarters of total ship-fuels floating in the strait, according to Kpler. That’s a 16% rise from October 4.