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Singapore suspends OBS' bunkering licenses after Hin Leong debacle

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Singapore suspends OBS' bunkering licenses after Hin Leong debacle

Highlights

OBS unable to fulfill its licensing commitment to date

OBS' bunkering licences suspended until further notice

Singapore bunker operations fairly smooth despite OBS development

Singapore — Singapore has suspended the bunkering licenses of Ocean Bunkering Services, part of the beleaguered Hin Leong Trading Group, but the move has had limited market impact on the world's largest bunkering port, industry sources said.

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"The Maritime and Port Authority of Singapore has been monitoring the development of Ocean Bunkering Services, an affiliated company of Hin Leong Trading," an MPA spokesperson said in a statement that was made available to S&P Global Platts on Oct. 21.

"Given that OBS has stopped its bunkering operations since April this year and has not been able to fulfill its licensing commitment to date, MPA has suspended their bunkering licenses until further notice," the spokesperson said.

The Singapore bunkering sector is "well diversified" with 44 other licensed bunker suppliers, the spokesperson said, adding that "MPA will continue to work with industry stakeholders to ensure that Singapore's supply chain for oil products and bunkering operations continue to function without any disruptions."

Limited market impact

According to MPA data, OBS was Singapore's third-biggest accredited bunker supplier by volume in 2019 and the biggest in 2018. In 2019, Singapore's total marine fuel sales stood at about 47.5 million mt.

The Singapore bunker market has shrugged aside the news of the suspension of OBS' bunker license, market sources said.

"OBS has not been in the market since March/April this year, so this makes no difference to supply or demand," a Singapore-based bunker supplier said.

Trading in the delivered low sulfur and high sulfur bunker fuel market was largely influenced by upstream movements in crude markers and demand rather than OBS' absence, market sources said.

The Singapore delivered Marine fuel 0.5%S bunker premium to the Singapore Marine Fuel 0.5% cargo assessments widened 62 cents/mt on the day to $15.44/mt on Oct. 20, with market sources reporting that the volume of inquiries was steady, pegging the slightly weaker day-on-day sentiment to a dip in upstream prices, which pressured the low sulfur bunker complex lower.

Meanwhile, the existing number of accredited bunker suppliers in Singapore is adequate to meet current demand, industry sources said.

The entry of Minerva Bunkering and TFG Marine as licensed physical bunker suppliers in the Port of Singapore has also helped allay fears over tightening barge supply after Hin Leong's collapse earlier this year, they said, adding that the two companies have also brought a semblance of stability to the market, which is facing challenges due to the global coronavirus pandemic as well as tough credit conditions.

Minerva Bunkering and TFG Marine are related entities by shareholding to the Mercuria Group and Trafigura, respectively, both of which are among the world's largest independent energy trading companies with significant presence in Singapore.