As additional flows are steered toward Asia in anticipation of European Union sanctions that go into force early next year, a fleet of tankers carrying Russian fuel oil has moored close to Singapore and Malaysia.
According to Vortexa Ltd., 1.1 million tons of high-sulfur fuel oil were being stored on boats during the week ending October 24. Even though it’s slightly lower than a record, the volume is still more than it was a year ago. HSFO is used to fuel ships with pollution-reduction equipment and to generate electricity.
Express Gas And Oil News
Singapore is a significant oil distribution hub in Asia and the largest ship refueling station in the world. Ship-to-ship transfers of crude oil or oil-related products are possible in the waters surrounding the city-state, notably those close to Malaysia’s Tanjung Pelepas port or the Johor Strait. This method is frequently used to conceal a cargo’s place of origin.
Russian fuel oil has occasionally been transported by several different ships before arriving in floating storage in the area. According to Vortexa, the Sagar Violet loaded fuel oil from Ust-Luga in Russia and then discharged some of its cargo into the Parosea tanker near Malaysia. Then Parosea transferred some fuel to Fortune Star, which was anchored close to Tanjung Pelepas at the time.
According to Roslan Khasawneh, a senior fuel oil analyst at Vortexa, Russian fuel oil is entering the regional ship refueling, refining, and power generation markets. Over the past three months, he said that about 65% of all Russian shipments that indicated Singapore as a destination ended up in commercial floating storage tanks at Tanjung Pelepas.
Following the industry’s implementation of emission reduction measures in 2020, fewer ships are using the polluting fuel, and its use in the production of electricity has also declined in recent years. According to data published by Bloomberg Fair Value, the influx of Russian flows into Asia has weighed on demand and reduced revenues from processing fuel oil to the lowest level since 2018.
John Driscoll, the founder and director of Singapore-based JTD Energy Services Pte Ltd, predicted that Russia would be reluctant to reduce its shipments of both oil and fuels. As EU sanctions approach, a growing amount of oil and products are anticipated to travel toward Asia and be stored aboard tankers between Singapore and Malaysia, he said.