A recent in-depth study carried out by VPS during Q1-2022, found a strong correlation between crude oil price and bunker fuel off-specs.
According to the study, one key concern for the industry is the escalating cost of fuel, mainly due to the Russian-Ukrainian war. Namely, for shipping, the cost of fuel has always been the major cost in relation to every single voyage and the demand for good quality fuel, at competitive prices, remains paramount, especially in these times of significantly increased costs.
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What is more, the relationship between the price of crude oil and bunker fuel quality was measured using the Pearson Correlation Coefficient giving a value of 0.701, indicating a strong correlation. This correlation shows that an increase in crude oil price will cause reduced bunker fuel quality and an increase in marine fuel off-specs.
Moreover, in recent weeks, VPS has seen an increase in the number of Bunker Alerts (BAs) issued corresponding with crude oil price, with a 60% increase this year versus the corresponding period in 2021.
The BAs that have been issued in 2022 have been across a range of 8 different ports for 9 different parameters and for the different bunker fuel types of VLSFO, HSFO and MGO. This suggests a general reduction in fuel quality across geographies caused by different factors and fuel types.
A good example of the type of -spec parameter that has be identified caused a major marine fuel quality issue identified in Singapore. This quality issue was related to chemical contamination of HSFO fuel delivered to over 200 vessels, which caused major operational problems to approximately 80 vessels.
VPS tried to identify and quantify the specific contaminants as several chlorinated hydrocarbons. The fuel had been supplied by two suppliers, with one actually providing the other with this contaminated product. It is alleged the first supplier blended a contaminated cutter stock to HSFO fuel, prior to it being sold.
