According to an ArgusMedia report, in Las Palmas one shipowner was led to buy more expensive 0.5pc sulphur fuel oil instead of high-sulphur fuel oil (HSFO).
What was the reason?
Tight supply of high-sulphur fuel oil (HSFO) for marine use in Las Palmas has led one shipowner to buy more expensive 0.5pc sulphur fuel oil instead, reflecting the increasing difficulty in purchasing HSFO for bunkering.
The International Maritime Organisation’s (IMO) 0.5pc sulphur cap does not come into effect until 1 January 2020, and most shipowners are not expected to make the switch from HSFO until November-December.
No switching back
But this particular shipowner told Argus that it has had to make the low-sulphur switch for at least one of its vessels sooner than it intended because of tight supply in Las Palmas, saying that it would have bought HSFO if it had been available.
The vessel in question will not switch back to HSFO before the IMO deadline and will continue to use 0.5pc sulphur fuel, the shipowner said.
Fuel price
The company is understood to have paid $583/t for 1,700t of 0.5pc sulphur fuel oil and $638/t for 200t of 0.1pc sulphur marine gasoil (MGO).
The fuel was shipped to Las Palmas from Gibraltar as cargo.
Minerva Bunkering, Peninsula Petroleum, Oryx Energies and Cepsa supply bunker fuel at the port. Only two of these currently have bunker HSFO to sell, according to one of the suppliers.
LSFO not very expensive?
High-sulphur 380cst fuel oil (HS380), the most commonly used marine fuel was offered by three suppliers for $495/t in Las Palmas yesterday, 15pc lower than the price the shipowner paid for the 0.5pc sulphur fuel oil.
But because HSFO prices have risen on the back of tight supply in the past two weeks, the low-sulphur IMO-compliant grade is not as expensive relative to HSFO as it has been.
Europe’s marine HSFO supply has tightened, with preparations for the upcoming IMO sulphur cap well under way. Prices have risen as a result, especially in the last two weeks.
Increase in HS380 price
The price of HS380 rose by 17pc in both Las Palmas and Gibraltar between 3-13 September, compared with an Ice Brent crude price increase of 7pc.
A further rise Brent price following the weekend attacks in Saudi Arabia sent HS380 prices up by a further 47pc in Las Palmas and 48pc in Gibraltar in the first two days of this week.
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Source: ArgusMedia
