Fuel and shipping lubricant prices soar as geopolitical and regulatory wrangling takes its toll


More than 40 marine fuel suppliers from around the world gathered at Posidonia this year at a critical time for the US$300 billion bunkering market, due to the double whammy of the geopolitical crisis and uncertainty surrounding the regulatory framework relating to the decarbonization of the maritime industry.

Alexander Prokopakis, CEO of probunkers, an Athens-based independent LNG bunker supplier, said: “Bunkering has been hit by the ripple effect of sanctions against Russia, and of course that has had a serious impact on price. Pre-war, world prices were around US$750-850 per ton, and now we are looking at prices above US$1,000.

“Since we are in uncharted territory, no one can really predict where the price will end up. Hopefully for now we will stay at this level, otherwise, breaking above the $1200 mark will have a detrimental ripple effect on the entire shipping industry.

His view is shared by another major bunker player with a strong Greek presence, Baluco. Commercial Director John Stavropoulos said: “The price of oil has doubled which has created an additional cost for ship operators as oil and lubricants account for nearly 60-70% of total ship operating expenses. . So the total cost per ride skyrocketed and it’s not just that. Credit lines for operators have also been impacted as they have to pay double the amount they paid before, in order to receive the same volume as before the crisis.

They both said bunker fuel demand has not been affected and has actually increased at ports outside Russia as supply points have been reduced.

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

“We have already seen an increase of 20 to 30 cents per litre, a peak of around 20%, but I am afraid we have not yet seen the end of this pressure on prices. We expect a further 10-20% increase by the end of the year, and we are doing our best to mitigate the increases,” said David Price, Managing Director.

The war in Ukraine also caused supply problems in the lubricants sector. According to Gregory Papathanassiou, director of Gulf Oil Marine Hellas, the supply has been reduced due to the sanctions against Russia and insists that hard work around the clock is the remedy to ensure and safeguard the safety of the supply. “We need to make sure lubricants are available when and where our customers need them. It causes a lot of hard work and tension. Of course, there are still many issues, but our goal is to make sure our customers don’t see or face these issues on their own,” he said.

He added that Gulf Oil Marine has recently invested in a blending plant and R&D facility in Singapore to help it stay ahead of the game, but acknowledges that bringing a new lubricant to market from zero requires a huge investment and a lot of time. for testing and approvals is long.

Nellos Economopoulos, managing director of Valecrest Marine Lubricants, seems to agree: “To be able to be ready for the future, we must first know what the future will be. Once the number one option for the fuel of the future is agreed, then we need to start preparing for it, in order to develop the appropriate lubrication solutions. We need to look at all options. It would take nearly two years to be able to do the necessary research, testing and infrastructure to bring new lubricants for the new fuels to market.

But as the experts say, the urgency may not be a problem, because the time when shipping will shed its dependence on fossil fuels is still years away.

Prokopakis said: “The future is still far away. There is no clear path where we are headed. My opinion, biased as it is, is that LNG is currently the only viable commercial solution available, and will remain so for the next 15 to 25 years. The infrastructure is there, it’s readily available, plentiful and safe, and it has a better environmental footprint than oil.

“I don’t believe in a single dominant fuel solution for the future, similar to what fuel oil is today. I think it will be a diverse energy mix, a mix of different options to choose from.

Many companies have taken advantage of their presence at Posidonia to publicize their innovations and new solutions for bunkering and lubrication.

American lubricant manufacturer Calumet Specialty Products Partners of Indianapolis has launched a synthetic lubricant solution. “Our latest solution delivers uncompromising performance while meeting and exceeding the stringent requirements of EU, US, EPA, VGP/VIDA and other labels,” said Rusty Waples, director of brand and product management.

And UK-based Auramarine, an expert in fuel and auxiliary systems, has invested in the development of one of the industry’s first methanol power units to meet the demand for methanol as a promising future fuel . CEO John Bergman said: “Shipowners want to invest in green fuels, but the challenge is finding the right solution and building trust to drive adoption.”

Posidonia continued to attract large audiences yesterday (Wednesday, June 8). Theodore Vokos, Managing Director of Posidonia Exhibitions SA, said: “We are delighted to see the overwhelming return of the global maritime community to Greece and Posidonia. After the busiest Tuesday of the event, with a total of 5,945 visitors, yesterday we witnessed the busiest Wednesday in history at a Posidonia, welcoming 8,356 visitors to the four halls of the Metropolitan Expo Center. This year’s Posidonia is the largest in our history and is about to become the busiest ever”. Posidonia 2022 is organized under the auspices of the Ministry of Maritime Affairs and Island Policy, the Union of Greek Shipowners and the Hellenic Chamber of Navigation and with the support of the Municipality of Piraeus and the Greek Committee for Maritime Cooperation.


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