The cost of bunkering a vessel in Asia has doubled in the last month due to the ongoing crisis in the Persian Gulf. VLSFO prices are now over US$1,000 a tonne and things could get worse before they get better.
This cost will of course be passed on to those who transport goods and eventually to the pockets of those who consume them. However, claims relating to bunkers tend to rise in times of extreme pricing. The cynical view is that there is more incentive for bunker suppliers to bulk up fuel with non-homogeneous additives. Some years back there was a spike in claims arising from a batch of off spec bunkers believed to have been first supplied in Houston. Have a look at our article on that here.
Shortage also becomes more of an issue as bunker prices rise. Less reputable suppliers have in the past tried to bulk up fuel with air – the so called “cappuccino effect” – to take advantage of high prices. We have also seen cases of illicit bunker theft by crew which of course leads to disputes between owners and the time charterers who own the bunkers.
The most serious consequences however arise from the detrimental effects of bad bunkers on machinery. In extreme cases pistons can seize, liners can fail and ships can become disabled if emergency repairs are not possible. That can put the ship, crew and cargo at risk if the blackout occurs in a narrow channel or in a port. It also means a possible tow or salvage claim, GA and possible cargo claims. In short, bad bunkers can cause serious issues.
The key to all this is to be vigilant when bunkering. Proper sampling and testing should be carried out before bunkers are consumed and, if in doubt, time limits in bunker supply contracts should be preserved. If there are problems when using the fuel then these should be notified immediately and, where possible, use of the fuel should be suspended and evidence preserved. These small steps can make all the difference if problems arise.
Nick Burgess
Partner
