Barge queues limit bunker supply in ARA and Gibraltar

High-sulphur marine fuel oil supply remains tight in the Amsterdam-Rotterdam-Antwerp (ARA) hub as barge capacity allocated to the fuel dwindles, while demand continues.

Barge queues for high-sulphur 380cst fuel oil (HS380) — up until recently the best-selling grade — have eased since last week, when delivery time was up to six days. But bunker suppliers charge premiums of around $20/t for prompt deliveries within a week. This prompt delivery premium for HS380 has doubled from $10/t in a year, a bunker supplier said.

Deliveries of 0.5pc fuel oil require three to four days' lead time in Amsterdam, while delivery times are shorter in Rotterdam and Antwerp. MGO is more readily available for prompt supply across the three ports.

Demand remains for high-sulphur marine fuel oil from shipowners that want to take advantage of widening discounts to low-sulphur marine fuels. In Rotterdam yesterday, HS380 was at a $246/t discount to 0.5pc sulphur marine fuel oil (0.5pc fuel oil) and at a $312.25/t discount to 0.1pc marine gasoil (MGO).

HS380 availability is also tight in the Gibraltar Straits as barge delays limit deliveries in the ports of Gibraltar, Algeciras and Ceuta. Prompt deliveries of HS380 are still possible, but at a premium. One supplier's earliest expected delivery time is from 2 December onwards, while another supplier's earliest delivery is from 1-2 December, and a third supplier's earliest delivery is from 2-3 December. Two other suppliers have stopped offering high-sulphur marine fuel, putting a further constraint on available volumes.

High-sulphur marine fuel has been at significant discounts to low-sulphur fuels in Gibraltar, where HS380 was at a $247.75/t discount to 0.5pc fuel oil and a $322.50/t discount to MGO yesterday.

Refineries across Europe have scaled down their high-sulphur fuel oil production since the end of the summer to prepare for the International Maritime Organisation's (IMO) sulphur cap. The cap will reduce the allowed sulphur content of marine fuel from 3.5pc to 0.5pc from 1 January, unless the ships burning it have exhaust scrubbers installed. The global shipping fleet's switch away from high-sulphur fuel is now well underway.

By George Henry and Erik Hoffmann