The Daily View: Don’t worry about bunker price, worry if there is any

BUNKER prices may have eased from the recent highs, but the Hormuz crisis has resulted in fuel shortages becoming more commonplace, especially in Asia.

The longer that Hormuz remains closed, the more widespread that problem is likely to become.

As brokers and owners gathered at GenevaDry this week, the stories of vessels finding it difficult to bunker at loading ports are starting to cause concerns.

The problem right now is pricing, which remains elevated as a result of the blocked Strait of Hormuz.

That’s causing problems not just for bottom lines, but in charter parties too — many of which were negotiated assuming a bunker price that looks paltry compared to the sums being demanded in ports today.

The problem tomorrow though, is not one that can be solved by a good broker.

Waiting times to load in Singapore are already up and if Hormuz stays shut into May the Asia delays are likely to extend into the Atlantic.

Russia may have hiked its fuel oil exports to the east of late, but as BRS have pointed out in its latest analysts’ report these remain insufficient to cover the loss from the Middle East.

Bunker availability is being spoken about as a realistic probability among owners and operators in Geneva.

Further speed reductions are possible, but that only gets you so far.

Price can be passed down the chain, but if there are no bunkers then there are no bunkers.

Without a ceasefire and a more permanent solution to the Hormuz crisis, the prospect of fuel shortages is going to start becoming a real operational problem.

There are only so many oil stocks to draw on and there will come a point soon where vessels must ask not how much bunkers are going to cost, but whether there are any at all.

Joshua Minchin
Senior reporter, Lloyd’s List

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