Asia Is Grabbing More European Fuel Oil to Ease Energy Crisis
(Bloomberg) -- Asia is taking more fuel oil from Europe to help deal with the energy crisis, according to a company that manages hundreds of ocean-going tankers.
There’s been a notable increase in shipments from Europe and the wider Atlantic Basin to the East in roughly the past 25 days, according to Per Heilmann, head of freight trading at Maersk Tankers A/S.
“We see an open price arbitrage from Rotterdam and Singapore on fuel oil markets,” he said, referring to situations where differences in prices make it profitable to move cargoes from one region to another.
The shortage of gas and coal means there is extra demand for residual fuel oil -- a low-value, low-quality oil product -- from the power sector. While that extra demand exists in many regions, it is strongest in Asia, according to the International Energy Agency.
Supertankers, which typically hold about 2 million barrels of crude, as well as Suezmaxes and Aframaxes -- capable of carrying roughly a half and a third as much cargo, respectively -- are being deployed for the trade, Heilmann said.
Maersk Tankers manages more than 220 product tankers.
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