Malaysia's two-week Covid-19 lockdown is not expected to significantly weigh on bunker demand, although any decision to extend the curbs could shift some demand to Singapore, said market participants.
Malaysia's full nationwide Covid-19 lockdown will last from 1-14 June. Bunkering operations and energy services, as part of essential economic and services activities, will be allowed to continue to operate, according to the country's national security council.
"Malaysia's shipping operations seem to be intact, similar to when Singapore went into lockdown, so I don't expect much impact," said one local trader.
"Bunker suppliers are working as usual and most have implemented contactless procedures," said another trader. "Most barge crew and frontline workers have been vaccinated already."
Bunker demand is not expected to shift to Singapore as the lockdown would only last for two weeks. But demand might change if the Malaysian government extends the lockdown.
Lockdowns have generally bolstered demand for consumer goods, which has boosted container trade. Container lines have resulted in a refuelling bottleneck in Singapore over the past months, with some taking up bunkers in Port Klang instead.
Malaysia vies with Singapore for bunker demand from vessels passing through the strait of Malacca, but has a less robust regulatory ecosystem and infrastructure compared to Singapore.
Port Klang, west of the capital Kuala Lumpur, is one of Malaysia's largest port in delivered bunker volumes, together with Tanjung Pelepas and Pasir Gudang in Johor. Suppliers in Port Klang typically buy cargoes from Singapore and Tanjung Pelepas before shipping it up north. No official bunker consumption data is available, but Malaysia accounts for about 3mn-4mn t of annual bunker demand, according to estimates.
