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Thursday, October 18, 2018

HFO trades

According to BP’s review, the world (except the Former Soviet Union) consumed 9.2 mbd of fuel oils in 2001, down from a peak of 9.9 mbd in 1997. Europe consumed 2.0 mbd, North America 1.5 mbd, Middle East 1.2 mbd, and the biggest consumer, according to BP, was the Asia-Pacific area with 3.4 mbd. The balance was consumed in Africa, Japan, China and Latin America.

There is a substantial seaborne heavy fuel oil export from the Former Soviet Union to Asia-Pacific. The Prestige, as also the Erika, was carrying heavy fuel oil. The accident with the 20,471 dwt 1970 built Russian tanker Nakhodka outside Japan caused a spill of some 17,500 tonnes of fuel oil off Oki Island in western Japan's Shimane Prefecture in January 1997. The victims of this accident were compensated GBP 86.3 million by the International Oil Pollution Compensation Fund. In October 1997 the 1977 built Suezmax Evoikos spilt some 29,000 tonnes of heavy marine fuel into the Singapore Straits after a collision with the empty Thai VLCC Orapin Global. The 1,578 tonnes HFO spill by Volgoneft 248 in December in Turkey 2000 almost went unnoticed, even if the effects of the pollution were quite strong. Lastly, the biggest pollution accident in 2001 involving the 37,000 dwt 2000 built double-hulled chemical tanker Baltic Carrier en route from Estonia with a load of 33,000 tonnes of heavy fuel oil for Newport, collided with the 34,365 dwt Tern, causing a 20 square metre gash in its starboard side, resulting in a spill of some 1,900 tonnes of HFO. In addition there have been a number of ships other than tankers that have spilt bunkers, and 8 of the 13 spills ITOPF attended in 2001 were from vessels other than tankers.

According to ITOPF, HFO is resistant to natural cleanup as well as being difficult to remove from the sea surface by booms and skimmer, chemical dispersants or any other means. HFO therefore has the potential to travel great distances from the original spill location and to cause widespread contamination of coastlines and damage to amenity areas, fishing gears, maricultural facilities and wildlife. This was illustrated by the Nakhodka incident in Japan, the ERIKA incident and now the Prestige.

Turning to the tanker fleet that can carry heavy fuel oils, we are not able to define this accurately. We have also seen that VLCCs have been carrying heavy fuel oils this year, which means that such fuels may be carried also in tankers without heating coils if discharged in the tropics.

If we look at the total number of tankers and combination carriers above 5,000 with heating coils we arrive at 1,927 and 754 of these have double hulls. However, we know that large tankers will not have heating coil in the cargo tanks. The total number of tankers above below 150,000 dwt with heating coils is 1,768. If we include only product tankers with heating coils we arrive at 801. The tankers and combination carriers that have heating cols in their cargo tanks should be between 800 and 1,700. SSY has identified some 360 tankers being fixed for HFO world wide.

Details of HFO spot fixtures and the tanker fleet with heating coils can be viewed here.