Bunkering division

Market overview

In 2020, the International Convention for the Prevention of Pollution from Ships (MARPOL) was amended to impose tighter limits on sulphur content in the bunker fuel oil. The restriction on the output of low-sulphur fuel products in the oil refining industry led to a shortage, causing prices to soar. As a result, Q1 2020 saw a 45% y-o-y increase in oil prices.

In the wake of the COVID-19 pandemic and a consequent decrease in global business activity across all industries, including the maritime transportation market, prices went down and stabilised in mid-2020. By the year end, prices resumed their upward trend, rising above the 2019 average by 15%.

Services

The Bunkering Division provides a full range of bunkering services: from fuel purchase to its transfer to the tanks of transport vessels in the ports of the Russian Far East (in particular, Vladivostok, Vostochny, Nakhodka). Also, as a fuel agent it arranges the supply of fuel oil products to FESCO's fleet at foreign ports. Oil products are purchased outside the Russian Far East, as well as from regional suppliers and distribution companies. FESCO's own oil depot is used to refuel vessels at berths, while the Division engages local tankers to refuel vessels at anchor.

In 2020, the Bunkering Division provided its services exclusively to the Group’s companies due to the market volatility, significant raw material shortages and a weakening demand from foreign vessel owners caused by high oil prices in the domestic market.

Operations