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KPI Bridge Oil selling more 2020-ready fuels than HSFO

CEO predicts 'frequent and significant price swings' prior to equilibrium.



Søren Høll, Group CEO at KPI Bridge Oil. Image credit: KPI Bridge Oil


Updated on 25 Nov 2019 10:33 GMT

KPI Bridge Oil reports that it is now, for the first time, selling more 2020-compliant fuels than high-sulphur fuel oils.

Discussing bunker sales over the last few months, CEO Søren Høll explained that the company began fixing 0.5 percent sulphur contracts at the beginning of the second quarter, and that demand has gradually risen since then as buyers have looked to secure the availability of IMO-compliant fuels prior to the January 2020 implementation date.

Høll noted that the company is seeing "significant price and availability fluctuations in most ports around the world" in the run up to 2020.

A price differential of 30-40 percent between compliant and non-compliant fuels has been previously forecast by KPI Bridge Oil, and this is supported by latest Bunker Index data which shows that the BIX World IFO 380 was 35 percent below the BIX World VLSFO 0.5 on November 22.

Høll suggests that an upward drive on prices would appear to be materialising, adding: "Until the market settles at a new equilibrium and the supply side has fully completed the transition, we'll see frequent and significant price swings depending on location and availability."

Preparations

Discussing the company's preparations ahead of 2020, Høll pointed out that KPI Bridge Oil has secured access to a new revolving credit facility and undertaken a comprehensive internal review of its business model to prepare its systems, operations and team members for the new regulations.

"Apart from advising on anything from local availability, port differentials, and route planning to how to prepare tank inspections, barge preparations, performing compatibility tests and risk assessments, we also established a management level global function which operates across functions and our 11 offices to specifically support individual customers and add extra value on 2020-related matters at this crucial time. Pooling together information, resources and technical expertise from specialists across our entities we aim to preempt some of the expected challenges currently faced by our business partners," Høll remarked.





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