Shipowners reluctant to load oil products at Italian ports due to coronavirus

Some shipowners in the West of Suez clean tanker market are hardening their stance on loading oil products in Italy, declining to pick up cargoes from the country's ports in fear of enduring a quarantine period amid the coronavirus outbreak.

So far, few known quarantines have been placed on vessels leaving Italy, with Novorossiisk the only port that has said it will not accept vessels that have just discharged in Italy for a quarantine period of 14 days.

Despite this, market participants have displayed shifting attitudes as the COVID-19 disease spreads, with Italy potentially excluded from cargo fixtures in the near term.

One shipowner said they were not loading in Italy unless at a sharp premium to the market, which was deterring charterers who want to pass on costs.

"We're trying to avoid it, but if an agreement can be put in place regarding premiums and liabilities, and if we need to fix the vessel, we can have a conversation," the owner said.

One shipowner argued however that disregarding Italian shipments altogether will have ramifications in itself.

"We have yet to encounter rejections for our vessels, but the market can't avoid Italy altogether -- this [accounts for] half of [all] loading and discharge in the Med," the shipowner said.

In terms of shipbrokers, one said he was avoiding looking at ex-Italy tankers to fix cargoes, suggesting the risk was too great.

"I'm ruling out fixing them personally, and I believe other brokers are adopting the same position. We have a choice, and some will choose not to pursue those vessels," he said, adding that other shipowners had now adopted a similar stance more widely, with the implications of a tighter overall market to come as ships will be ruled out from fixing.

Another shipbroker forecast that vessels recently discharged ex-Italy will likely pursue cabotage shipments across Italy until cargoes are exhausted, in which case owners will accept a potential quarantine of 14 days before reintegrating into the market. The net effect of this in terms of tightened tonnage will therefore likely only be felt in the next couple of weeks, the broker said.

At present the market has not yet come to a standstill, and operations have sustained only minor delays so far due to sanitary inspection on clearance operations upon vessel arrival. Pilotage is also reportedly only operating in daylight in France, sources said.

In Spain loading and discharge operations at ports will continue despite the country undergoing a lockdown process, according to shipping agents Alfaship, with no quarantine procedure in place for vessels from high risk areas arriving into Spanish ports.

Overall, market participants in the Med continued to stress that the situation could change very quickly and existing conditions would likely not be the case going forward.