“Bunkering in a time of transition” attracted more than 250 delegates, eager to seek advice on how to navigate the turmoil now taking place in their national markets in the Americas and the Caribbean.
“The collapsing of oil prices, sliding freight rates, stagnant economies and onerous new environmental regulations have together, with the disappearance of one of the largest bunker trading companies, created some of the most uncertain trading conditions in living memory,” said Petrospot managing director Llewellyn Bankes-Hughes.
“This year will be a significant watershed for oil, shipping and bunker markets but we [in the sector] are wondering what lies ahead,” noted Bankes-Hughes as the Americas are suffering a slowdown of their economies, growing fiscal deficits and falling prices of commodities.
The shift enforced since 1 January 2015 from using low sulphur residuals to predominantly low sulphur distillate (gas oil) in the Emission Control Areas (ECA) of the Baltic Sea, the North Sea and English Channel, and North America, US Virgin Islands and Puerto Rico, has received “a general reasonable level of compliance according to reports from Port State Control authorities,” said UK-based LQM Petroleum technical manager Nigel Draffin.
“The additional demand on gas oil availability is not a problem although in some areas they must import gas oil to meet the increased demand,” he added. These fuels (gas oil) are available in most ports worldwide, although they are still difficult to get in some specific areas including some countries of Latin America, he said.
“Latin America has growth potential for marine fuels whereas some people believe that North American demand will shrink because of the nature of trade activity. We foresee that most growth would come from the Middle East and Far East, some in Africa and in Latin America, whilst the Mediterranean and Europe will be flat, [in the years to come]” said Draffin, an industry veteran and a founder member of the International Bunker Industry Association (IBIA).
“The bunker market will continue to grow but at a much slower pace than expected,” he noted. The suppliers in the Caribbean region need to prepare to meet the demand for new fuels (bio-fuels, LNG and hybrid 0.1% sulphur fuels) as this demand develops.
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