Bunker Market

The bunker market is a very volatile one. Prices are constantly changing in response to the laws of supply and demand.  Not only do prices vary from port to port but also prices from different suppliers within a port differ.  A ship manager will have to keep a watchful eye on the worldwide bunker market which comprises three elements; cost availability and quantity. As has been explained, this is constantly changing, and in order to keep track of these changes the Operations Department will have to check constantly with all the major bunker suppliers.  This process is a time consuming one, and if the manager does not purchase a large tonnage throughout the year he might well find it more expedient to employ one of the specialist bunker brokers.  A ship manager should always bear in mind that the ‘majors’ (the large international oil companies such as Shell, Texaco, Exxon, BP etc.) do not necessarily offer the cheapest product.  Small ‘independent’ suppliers can sometimes better the prices of the majors. Even in a major bunkering port; abnormal delays can occur from time to time.  These delays can be caused by any number of factors such as unusually heavy demand, breakdown of one or more of the bunkering barges or shortage of product.  A careful watch has to be kept on possible delays as any lengthening of the bunkering operation could make bunkering at that particular port uneconomic. Hand in hand with the cost of bunkers goes the quality.  Unfortunately today with the increasing sophistication of the refining of petroleum product the residual oil which is the main basis of IFO, is becoming poorer in quality.  Inferior quality not only means the likelihood of a higher consumption for the same distance but can also mean problems inside the engine some of which could result in permanent damage to major components.