Marine fuel and lubricant prices skyrocket in the wake of geopolitical and regulatory turmoil

More than 40 ship fuel suppliers from around the world gathered in this year’s Poseidonia, at an extremely critical juncture for the $ 300 billion fuel market, due to the double “explosion” caused by the geopolitical crisis and regulatory uncertainty. framework for the exemption of the shipping industry from coal.

Alexandros Prokopakis, CEO of probunkers, an Athens-based independent LNG fuel supplier, said: “The fuel transport market has been hit by sanctions against Russia and this, of course, had a serious impact on prices. world prices were around $ 750- $ 850 per tonne and now we see prices well above $ 1,000. levels, because a possible overrun of the $ 1,200 limit would have a knock-on effect on the entire shipping industry. ”

His views are shared by another important bunkering player with a strong Greek presence, Baluco. Commercial Director Giannis Stavropoulos said: “The price of oil has doubled and this has created additional costs for shipping companies, because oil and lubricants represent almost 60% -70% of the total operating costs of each ship. Thus, the total “Cost per voyage has skyrocketed – and not only that. Shipping credit lines have also been affected, as they have to commit to double the amount they used to receive to receive the same amount of fuel they received before the crisis.”

Both noted that demand for fuel transport had not been affected – in fact, it had risen in ports outside Russia as supply points had dwindled.

In addition to the impact on fuel prices, shipping companies and their customers face higher costs due to more expensive lubricants. Gulf Oil Marine, a major international manufacturer and supplier of lubricants, says the price increase varies depending on the market.

“We have already seen an increase of between 20 and 30 cents per liter, which corresponds to a price increase of about 20%, but I am afraid we have not yet seen the end of this price pressure. We anticipate a further increase of 10% -20% by the end of “and we do the best we can to mitigate the increases,” said David Price, CEO of the company.

The war in Ukraine has caused supply problems in the lubricants sector as well. According to Grigoris Papathanassiou, CEO of Gulf Oil Marine Hellas, supply has been reduced due to sanctions in Russia, but hard work around the clock is the medicine to ensure supply stability. “We need to make sure lubricants are available whenever and wherever our customers need them. This requires a lot of hard work and effort. Of course, there are still a lot of issues, but our goal is to make sure our customers do not have these problems.” issues on their own, “he added.

He added that Gulf Oil Marine had recently invested in a blending and R&D facility in Singapore to stay ahead of the curve, but acknowledged that putting a new lubricant on the market from scratch would require a huge investment and time, as testing processes and approvals are time consuming.

Nellos Economopoulos, General Manager of Valecrest Marine Lubricants, seems to agree: “In order to be ready for the future, we must first know what the future holds. Once the number one choice for future fuel is agreed, then we have to start preparing to develop the right lubricant solution.We have to look at all the options.It will take almost two years to be able to do the required research, testing and develop the right infrastructure to enter the market with a new lubricant for new fuel products “.

But experts say urgency may not be a problem, as the time for shipping to get rid of its dependence on fossil fuels is still several years away.

Prokopakis said: “The future is still far away. There is no clear path to where we are going. My view, however biased, is that LNG is currently the only viable commercial solution available, and will remain so. “For the next 15-25 years. The infrastructure is here, it is readily available and safe, and their environmental footprint is better than that of oil.”

“I do not believe in a single, dominant fuel solution for the future, similar to what fuel oil is today. I think we will come up with a diversified energy mix, a mix of different options for everyone to choose from,” he added.

Many companies have used their presence in Poseidonia to raise awareness about their innovations and the new bunkering and lubrication solutions they offer.

Lubricant manufacturer Calumet Specialty Products Partners from Indianapolis, USA, has released a synthetic lubricant solution. “The Environmentally Acceptable (EAL) solution offers us uncompromising performance, while meeting and exceeding the strict requirements of the European Eco-label, and the corresponding US, EPA and VGP / VIDA standards and requirements,” said Rusty Waples, Director Brand and Product Management of the company.

And the British Auramarine, specializing in fuel and auxiliary systems, has invested in the development of one of the first in the industry Methanol Fuel Supply Unit to meet the demand for methanol as a promising future fuel. “Shipowners want to invest in green fuels, but the challenge is to find the right solution and build a sense of confidence that will drive its use,” said CEO John Bergman.

Poseidonia continued to attract crowds of visitors yesterday (Wednesday, June 8). Theodoros Vokos, CEO of Poseidonia SA Exhibitions, said: “We are excited to see the impressive return of the global shipping community in Greece and Poseidonia. After the busiest Tuesday in the history of the Exhibition, with a total of 5,945 visitors yesterday “On Wednesday with the largest attendance of any previous Poseidonian week, welcoming 8,356 visitors to the four halls of the Metropolitan Expo. This year Poseidonia is the largest in history and will surpass any previous record of participation.”

The Poseidonia 2022 Exhibition is under the auspices of the Ministry of Shipping and Island Policy, the Hellenic Shipowners Association and the Maritime Chamber of Greece, with the support of the Municipality of Piraeus and the Hellenic Committee for Maritime Cooperation.