2020 Sulphur cap complicating bunker effect of Saudi oil output cut.

Catogory : Market Report

THE abrupt drop in Saudi oil production and exports has not had a significant impact on the bunker supply market despite price hikes, according to a source. Bunker prices spiked for heavy Sulphur fuel oil in all main bunkering hubs on Monday after an attack on Saudi Aramco facilities removed 5% of global crude oil supply from the market and sent Brent crude price soaring by around 20% to almost $72 before falling to around $66.4 later during the day.

Saudi Aramco has not confirmed how long it will take for it to restore the damaged pipeline, but latest media reports on Monday suggested the firm was recovery. So far however, there does not appear to be direct operational implications for bunker suppliers, according to Monjasa chief operating officer Svend Stenberg Mølholt. He said that there are no significant impacts on the supply chain now and they are not suffering on the supply side.

“There may be some buyers who will take a wait-and-see approach, due to price hikes, so there may be a few people taking a couple of days before they buy bunkers,” he said. But Mr Stenberg Mølholt, whose Monjasa supplied 4.1m tonnes of fuels to ships in 2018, believes that with the 2020 Sulphur cap ushering in the production of very-low Sulphur fuel oils in refineries and procurement from bunker suppliers, there is already a lot of balancing being done in different products in different regions.