Thu 29 Nov 2012 13:07

Relationships and trust key to managing counterparty risk


Møller says industry must be wary of developing a 'too scientific' approach, which may stifle deals and progression.



Dynamic Oil Trading, the new global trading company for marine fuels and lubricants, headquartered in Singapore, today highlighted the importance of developing close relationships as a means of managing counterparty risk.

“Liquidity and credit are the single biggest issues within the shipping industry when it comes to fuel supply,” said Lars Møller [pictured], CEO, Dynamic Oil Trading.

“Being able to provide the best credit terms is a considerable differentiator for a fuel supplier, but it has to be done based on a trustworthy relationship between the supplier and the customer. Due diligence as well as access to financial information is clearly vital, but the foundation for obtaining this is trust,” continued Møller.

As liquidity becomes tighter, Dynamic Oil Trading says ensuring the financial viability of those partners operating in the fuel supply chain is of paramount importance. However, the company believes there has to be a balance between forensic analysis that stifles deals at one end of the spectrum, versus a simple 'handshake', which could threaten business continuity.

“Dynamic Oil Trading is in a fortunate position, as we have the financial backing, liquidity and capital that enables us to provide customers with the best credit terms on deals. Understanding counterparty risk is critical, but we must be careful that it does not become too scientific, which threatens deals. Of course, where a company is not financially viable, you walk away, but in conjunction with sensible due diligence and financial analysis, we believe that building close, personal and trustworthy relationships must be the foundation of validating counterparty risk," said Møller.

Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.

Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.

Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.

Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

Stanley George, VPS Group Technical and Science Manager, VPS. How to engineer and manage green shipping fuels | Stanley George, VPS  

Effective management strategies and insights for evolving fuel use.

Sweden flag with water in background. Swedish government bans scrubber wastewater discharges  

Discharges from open-loop scrubbers to be prohibited in Swedish waters from July 2025.

The ME-LGIA test engine at MAN's Research Centre Copenhagen. MAN Energy Solutions achieves 100% load milestone for ammonia engine  

Latest tests validate fuel injection system throughout the entire load curve.

Terminal Aquaviário de Rio Grande (TERIG), operated by Transpetro. Petrobras secures ISCC EU RED certification for B24 biofuel blend at Rio Grande  

Blend consisting of 24% FAME is said to have been rigorously tested to meet international standards.

Avenir LNG logo on sea background. Stolt-Nielsen to fully control Avenir LNG with acquisition  

Share purchase agreement to buy all shares from Golar LNG and Aequitas.

Seaspan Energy's 7,600 cbm LNG bunkering vessel, s1067, built by Nantong CIMC Sinopacific Offshore & Engineering Co., Ltd. Bureau Veritas supports launch of CIMC SOE's LNG bunkering vessel  

Handover of Seaspan Energy's cutting-edge 7,600-cbm vessel completed.


↑  Back to Top