Marine fuel oil supply limited at Piraeus

Market: Oil products
27/09/19

Marine fuel oil has been unavailable from several suppliers at the Greek port of Piraeus this week, as local refiners cut production.

Suppliers at the port said Hellenic Petroleum and Motor Oil Hellas (MOH) have produced less high-sulphur fuel oil (HSFO) in recent weeks to prepare for the 0.5pc marine fuel sulphur cap from 1 January 2020, but demand is still noticeable. A marine fuel supplier in Piraeus said it had not received any marine fuel oil from Hellenic in over a week. Another supplier had not received any deliveries from either of the two refiners this week.

The suppliers have told their shipowner customers that marine fuel oil will be available again from 2-3 October.

HSFO has been tight at Piraeus and other Mediterranean bunkering ports since the beginning of September, and this has supported marine fuel prices. The price of high-sulphur 380cst (HS380) marine fuel oil — the most popular grade — has risen sharply in Piraeus from a low of $281.50/t on 3 September to $393.25/t yesterday. That compares to an 11pc rise for marine gasoil (MGO), which is more readily available, and a 7pc gain for Brent crude over the same period.

Hellenic has said it will start producing 0.5pc marine fuel oil in the fourth quarter of this year, and that it expects to cover the Greek marine fuels market with its new product and HSFO. MOH recently took a less sulphurous crude to its 175,000 b/d Corinth refinery for the first time since 2011, in an effort to lighten its crude slate and produce lighter distillates and 0.5pc sulphur marine fuel.

HSFO is in scarce supply across the whole of the Mediterranean. Other refineries such as Tupras in Turkey and ORL in Israel have lowered HSFO output ahead of the International Maritime Organisation's (IMO) sulphur cap, which has resulted in tight marine fuel availability in the region.

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