According to the trade sources, shippers are making efforts to minimize their time in the Middle East following the incident of oil tanker’s attacks pushed up the insurance costs. They are scaling back purchases of marine fuels from the Fujairah oil hub of the UAE.
Rather than doing that, they have started to turn primarily to Singapore, which is the top refueling hub of the world, to purchase marine fuels, also famous as bunkers, with some moving towards smaller bunkering ports, inclusive of in India & Sri Lanka, the sources told.
A ton of 380-centistoke high-Sulphur fuel oil (HSFO) in Fujairah has glided from an average $5 to $10 premium over Singapore in May to a discount of $30 to $70 over the last two weeks, according to 3 sources.
A Singapore-based marine fuels dealer for a large supplies merchant stated that $50 per ton below Singapore? Do Bargaining, if you can cover the war risk premium.
Due to the firms’ policy, all of the sources refused to be identified.
An outbreak of attacks on tankers since May around the Gulf of Oman and the Strait of Hormuz has sent war risk insurance costs mounting, warning ship operators to cut back the time spent in the region as much as possible.
The Singapore-based dealer stated that there is extensive evidence that the vessels are avoiding Fujairah & this is causing rushing demand in Singapore.
Owners of Ship pay yearly war-risk cover, as well as, an additional ‘breach’ premium when tapping into high-risk areas. These additional premiums are calculated according to the value of the hull or the ship, for seven days.
Ship insurers have cited the breach rate for 7 days at almost 0.35% from as much as 0.5% two weeks ago. This war risk premium is a nightmare, stated a Singapore-based shipbroker executive.