On June 11, Integr8 Fuels, unveiled its Bunker Quality Trends Report for Q1 2024. The report highlighted various concerns, such as the effects of the Red Sea closure on VLSFO (Very Low Sulphur Fuel Oil) compliance, alongside emerging trends in bunker fuel quality.
In this report from Integr8 Fuels, bunker quality and claims manager Chris Turner advises shipowners and bunker buyers on how they can improve their buying processes and performance.
Tapping into the world’s biggest bunker fuel quality sample database, Turner reveals the most pressing quality issues the industry is up against. These include:
- Red Sea closure affecting VLSFO compliance for vessels rerouting around Africa
- Global VLSFO compliance suffers as suppliers stretch barges to cash in on rising HSFO demand, driven by increasing scrubber numbers
- Two-thirds of fuels are still sold with obsolete (pre-2017) specifications. Can the new ISO specs finally shake up old school practices?
- Profit margin-motivated blenders push more HSFOs over ISO limits
- VLSFO sulphur off specs worsening in the ARA and partly driven by high- to low sulphur barge switching
Red Sea closure impact on VLSFO compliance
Geopolitical events often have a knock-on effect on fuel quality, sometimes relating to blending economics, and occasionally, also relating to the impact on barge infrastructure because of rapidly changing demand.
Since October 2023, many more vessels have been rerouting around Africa rather than travelling via the Red Sea, resulting in a significant increase in volume of HSFO demand, with.
..the report highlights.
During the same period, there has been a 30% increase in VLSFO sulphur off specification incidents in ports along the African coast and nearby Spain, which upon closer inspection, show a root cause of affected barges also carrying HSFO.
Integr8 Fuels’ analysis has identified suppliers running a similar model who are unaffected – this likely due to their infrastructure allowing double valve segregation and separate manifolds onboard the barge preventing any cross-over contamination, and/or proper management of grade changeover.
VLSFO biofuel blends: Off specification incidents
Despite initially reporting that VLSFO biofuel blends had no compliance issues, the latest report indicates that these are now a challenge with around 8% of fuels identified as containing FAME from B7 to B40 concentration testing above the limit. The root cause of these problems is difficult to ascertain, however given the demand for biofuel blends being hit or miss, the possibility of having to use a non-dedicated barge for supply remains the most likely at this time.
No high risk off specifications were noted for VLSFO FAME blends given that the blending of biofuels into VLSFO will reduce metals (since, for example, FAME is aluminium and silicon free), furthermore we note that TSP (stability) is not adversely affected by the addition of FAME.
The increase in HSFO demand is also putting pressure on supply models.
Another factor is the significant increase in the number of vessels equipped with scrubbers, resulting in a far higher demand for HSFO than in recent years with data available to Integr8 suggesting approximately 100 million MT of deadweight tonnage being either delivered or retrofitted with scrubbers in 2023. This combined with the price spread which remains very appealing, and scrubber assets travelling further at higher speeds, continues to support the demand going forwards.
As explained, suppliers of course want to meet this increased demand and in doing so place transitional temporary pressure on existing assets or could be forced into a sea change in strategy, both of which may result in the practice of storing both HSFOs and VLSFOs onboard the asset.