• 2018 November 2 11:27

    MABUX: Bunker market is awaiting further clarity as Iran sanctions loom

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have fallen roughly $10 per barrel in the past three weeks, awaiting more signs of a clear direction. The overall market sentiment is bearish. Global trade is also slowing down, with freight rates decreasing after an extensive period of growth. OPEC has started sending mixed signals, forecasting that the global oil market would shift to oversupply in Q4 2018 amid high stockpile rates.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated slight irregular changes in the period of Oct.25 – Nov.01:
        
    380 HSFO - up from 469.79 to 472.57 USD/MT     (+2.78)
    180 HSFO - up from 517.21 to 518.71 USD/MT     (+1.50)
    MGO         - down from 722.86 to 719.79 USD/MT (-3.07)


    Cumulative oil production by Russia, the United States and Saudi Arabia reached 33 million barrels per day (bpd) for the first time in September. That's an increase of 10 million bpd since the start of the decade, meaning the three producers alone now meet a third of global crude demand.

    Meantime, OPEC and its Russia-led non-OPEC partners in the production cut deal may have to change course in the current relaxing of the cuts, due to increased inventories in recent weeks and uncertainties about the global economy. OPEC and allies agreed in June to relax compliance rates with the cuts to 100 percent from the previous over-compliance and achieved a combined compliance rate of 111 percent in September. The IEA in turn pressed the cartel to increase production.

    Russia has already reversed the entire 300,000 bpd cut and additionally boosted production last month: it reached 11.36 million bpd - a record high for the post-Soviet era. Although RF hit a post-Soviet record in its oil production last month, it doesn’t plan to raise output to 12 million bpd by the end of 2018, or in the near term, because this wouldn’t fit Moscow’s economic development plans. Currently, Russia is pumping 150,000 bpd above the October 2016 level, so in total, the country has increased production by 450,000 bpd since May.

    It is expected that China will lead global refinery capacity expansion and investments with 3.12 million bpd additional refining capacity and US$67.3 billion capital expenditure through 2022. Total refining capacity in the world is expected to grow by 15.1 percent between 2018 and 2022. Among individual countries, China is the leader, with ten new-build refineries expected to come on line by 2022, followed by Nigeria and Kuwait. The top ten also includes Iraq, Iran, Turkey, Brunei, Indonesia, the Philippines, and Saudi Arabia.

    Meantime, it was reported that China’s largest refiners, state-held Sinopec and China National Petroleum Corporation (CNPC), haven’t booked any crude oil cargoes from Iran for November due to fears they would be in breach of the U.S. sanctions on Iranian oil. The key concern is the uncertainty over whether Iran’s Chinese customers would obtain waivers from the sanctions. Iran, for its part, is keen to keep its single biggest oil customer when U.S. sanctions on Iranian oil exports kick in. Forecasts have assumed that China will keep buying Iranian oil and could be the only certain meaningful customer of Iran, because the other major buyer, India, is even more hard-pressed by the United States to wind down purchases from Tehran.

    The European Union (EU) in turn is working to set up a payment mechanism for trade with Iran, and that mechanism should be legally in place by November 4, when the U.S. sanctions on Iran return. Meantime, it is expected that the mechanism won’t be operational until early in 2019. Still, the biggest European companies are withdrawing from Iran due to the U.S. sanctions. The EU’s oil imports from Iran are also expected to cease as refiners are not eager to open them-selves up to risk. Iran’s crude oil and condensate exports fell to 1.9 million bpd in September.

    The United States has recently hinted that it was at least considering waivers, but U.S. Treasury Secretary Steven Mnuchin said that it would be more difficult for Iranian oil customers to get waivers from the sanctions than it was during the Obama administration, and the United States would issue waivers, if any, only to buyers that have significantly reduced Iranian purchases.

    China finds it hard to understand why the United States is not sending senior government officials to a major import expo in Shanghai next month. Set to run from Nov. 5 to Nov. 10, the China International Import Expo will bring together thousands of foreign and Chinese companies, aiming to boost imports, allay foreign concern about China's trade practices and show readiness to narrow trade gaps. The United States does not plan to send senior government officials to the fair, urging China to end what it called harmful and unfair trade practices.

    At the same time more than 70 percent of U.S. firms operating in southern China are considering delaying further investment there and moving some or all of their manufacturing to other countries as the trade war bites into profits. The trade war is shifting both supply chains and industrial clusters, mostly towards Southeast Asia. U.S. companies reported facing increased competition from rivals in Vietnam, Germany and Japan, while Chinese companies said they were facing growing competition from Vietnam, India, the United States and South Korea. The top concern of companies was the rising cost of goods sold, which resulted in reduced profits. Other concerns included difficulties managing procurement and reduced sales.

    Production in the U.S. is set to rise further. U.S. drillers added two oil rigs in the week to Oct. 26, bringing the total count to 875, the highest level since March 2015. More than half of all U.S. oil rigs are in the Permian basin in West Texas and eastern New Mexico, the country's biggest shale oil formation.

    The U.S. has been trying to delay the implementation of regulations on maritime fuels beyond the January 1, 2020 start date. However, the International Maritime Organization (IMO) dismissed the effort, and said that the regulations are set to go ahead as scheduled. Be-ginning in 2020, maritime ships will have use fuels with sulfur concentrations of just 0.5 per-cent, down from the current limit of 3.5 percent. Besides, the prohibition of the carriage of non-compliant fuel oil for combustion purposes or operation on board a ship (unless equipped with a scrubber) will enter into force on 1 March 2020.

    With Iran sanctions set to take effect in a few days, the market is awaiting further clarity. Saudi Arabia and Russia have vowed to cover any supply shortfall, but Iran’s oil exports likely won’t go to zero. We assume bunker prices may continue volatile irregular fluctuations in the beginning of next week with further possible transformation into more balancing phase.

     

     

     

     

     

     

     

    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)




2019 August 24

14:42 Eastern Shipbuilding delivers the CAPT. JIM McALLISTER with a USCG Sub-M COI to McAllister Towing
13:26 Gulf of Mexico Lease Sale yields more than $159m in high bids, continues Upward Trend Under Trump Administration USDoI
11:38 Grieg Star takes delivery Supramax vessel the Star Damon
10:58 DNV GL launches renewables certification operations in U.S.

2019 August 23

18:36 Bridge parts transported for second Theemsweg route bridge
18:06 CMA CGM announces GRR from Asia to East and South Africa, Indian Ocean
17:55 Onezhsky Shipyard launches TSHD Yury Maslyukov
17:36 First CLEANBU wet-dry cargo switch with significant positive environmental impact
17:20 Atomflot and Baltiysky Zavod sign agreement on construction of fourth and fifth nuclear-powered icebreakers of Project 22220
17:05 CMA CGM announces FAK rates from Asia to the Middle East Gulf
16:45 MPI Resolution started blade repair campaign in offshore wind farm
16:35 PIL’s fleet attains Environmental Ship Index (ESI) certification
16:05 Botlek becomes Vopak's styrene hub
15:44 First-of-a-kind floating nuclear power unit Akademik Lomonosov leaves Murmansk for Pevek
15:23 CMA CGM will not use the Northern Sea Route
15:17 Vessel powered by ABB Azipod® propulsion reaches North Pole for the first time in history
15:13 NOVATEK’s Board recommends 1H 2019 dividend
14:47 PGNiG Group posts more than PLN 22.6bn in revenue for H1 2019
14:16 BC Ferries supports whale research at Galiano Island
13:52 Marsden Point, New Zealand tops BIMCO Terminal Vetting Report
13:29 Missile cruiser Marshal Ustinov entered Mediterranean Sea
13:08 Boskalis half year result 2019 tainted by offshore projects
12:34 Sevastopol Sea Port to be subsidized with RUB 54 million by municipal government
12:08 Bibby HydroMap commences second UXO survey for Vattenfall
11:40 Tests of unique replenishment system of Akademik Pashin tanker successfully completed
11:08 DP World Liège Container Terminal boosts eco-efficiency with Konecranes
10:55 Eesti Energia to use Klaipėda LNG terminal services
10:26 Hamburg, Germany to host 15th Arctic Shipping Summit on 4-5 December 2019
10:07 Bridge parts transported for second Theemsweg route bridge
09:53 Brent Crude futures price is up 0.1% to $55.98, Light Sweet Crude – up 0.01% to $55.35
09:34 Bunker market sees mixed price movements at the port of Saint-Petersburg, Russia (graph)
09:19 Baltic Dry Index is up to 2,118 points
09:07 Damen wins UX Design Award for Human Machine Interface for Tugs
08:35 MABUX: Bunker Market this morning August, 23
08:07 World’s largest all-electric ferry completes its maiden trip

2019 August 22

18:04 Australian Maritime College and KONGSBERG eye potential for VR training with renewed support program
17:39 Nordic Engineering sponsors roundtable meeting “Import Substitution in Russian Shipbuilding: Ambition and Reality”
17:04 DOF Subsea issues Financial Report for 2nd quarter of 2019
16:47 Karelia proposed construction of deep-water freight and passenger port Kem’
16:25 Bunker prices go down at the Far East ports of Russia (graph)
16:04 Navios Acquisition reports results for H1 2019
15:53 PJSC TransContainer reports its Financial Results under IFRS for 6M'2019
15:12 ReCAAP ISC has released Guidance on Abduction of Crew in the Sulu-Celebes Seas and Waters off Eastern Sabah
15:04 Essar Ports expects to meet 60 MT target for FY20
14:31 Höegh LNG announces interim results for the quarter and half year ended 30 June 2019
14:14 Peel Ports takes important step towards being Brexit ready
13:56 Yamal LNG shipped twenty million tons
13:35 Arctic block of Far East Investment and Export Agency headed by Dmitry Fishkin
13:13 Sea Machines successfully deploys industry’s first autonomous spill-response vessel
12:28 Fire onboard MV Pyotr Tchaikovsky kills one in Saint-Petersburg
12:13 Frontera Offshore and DOF Subsea join forces for the Subsea Construction and IMR Mexican market
11:31 Kalmar to enhance STS crane capabilities at EUROGATE Tanger
11:21 HELCOM publishes report on noise sensitivity of animals in the Baltic Sea
10:59 HELCOM gets a new Executive Secretary
10:35 Caterpillar Eurasia and Admiral Makarov University agreed on establishing a brand new up-to-date training center
10:10 Steps towards new treaty to protect marine biodiversity
09:38 Brent Crude futures price is down 0.41% to $60.04, Light Sweet Crude – down 0.38% to $55.47
09:20 Hapag-Lloyd announces changes of North Europe Mediterranean Express Service
09:13 Baltic Dry Index is up to 2,061 points
08:44 MABUX: Bunker market this morning, Aug 22