World Bunkering > News > Summer 2010 > Mediterranean Round-up

Over 200,000 merchant vessels of over 100 gt are believed to cross the Mediterranean Sea each year. More than 2,000 ferries, 1,500 cargo ships and 2,000 local commercial craft, including 300 tankers operate permanently in the Mediterranean, and about a third of the world’s total merchant shipping traffic either trades to seaports or passes through the Mediterranean.

Ships can and do take bunkers in many ports around the Mediterranean but by far the majority of supplies are delivered in a small number of hubs: Istanbul, Malta, Piraeus, Port Said and the ports around the Strait of Gibraltar/Algeciras and Port Said.

Nikolas Zaharopoulos, a senior bunker trader at Aegean Marine Petroleum Network Inc. (AMPNI), says that while these main ports, located on the main shipping lanes fight it out for the first place in terms of volume, it is new ports that are claiming significant volumes at present. AMPNI supplies over 2 milion tonnes in the Mediterranean region.

Mr Zaharopoulos says that, like the rest of the world, the Mediterranean’s shipping businesses have been set back over the past 18 months. He says: “There seems to be mixed views on how the region’s shipping will fare in 2010. Bunker volumes have fallen as fewer ships have been trading. Now everybody is hoping for a quick recovery in the Med.”

It should be mentioned, though, that volumes have not fallen everywhere in the Mediterranean and have held up well in the ports located near the Strait of Gibraltar.

Spanish oil trader and physical supplier in Ceuta, Vilma Oil, concluded in 2008 that volumes appeared stable or on the rise in the Mediterrranean’s western gateway and justified the company expanding into deliveries by barge. A spokesperson said that one important factor was that it was just about the last place where ships heading towards the northern European Emission Control Areas (ECAs) could take on low-sulphur fuel oil and 0.1% gas oil. A Gibraltar bunker industry insider confirmed that this was a significant factor in keeping volumes up.

Mr Zaharopoulos says that in the Mediterranean generally there is still little demand for low-sulphur fuel. He sees low sulphur as making up between 15% and 20% of total volumes. He thinks the chances of a Mediterranean ECA being created are low, at least for the next couple of years He adds that while the current economic climate is very tough, there are still opportunities in the global bunkering industry, including in the Mediterranean. AMPNI has a major newbuilding programme underway and a portion of that additional tonnage will be deployed to Piraeus, Tangier and Gibraltar.

On the increased counterparty risks caused by the economic downturn, he comments: “The risks we take on every day when trading are huge compared to a company of similar size in another industry. Only by careful selection and constant monitoring of our clientele can we keep trading without missing opportunities.” He stresses that building business partnerships is particularly important in the current economic climate. Good relationships are essential for every company, be they supplier or consumer, and the mutual support benefits both.

“The first signs of economic recovery are on the way and everybody feels the breeze of good news coming from all over the world,” says Mr Zaharopoulos, “but we have to be careful. The economies coming out of the crisis are very fragile and we may need a couple of years more, before we see real growth in the world trade. Though the USA seems to be coming out of recession, and India with mighty China never really got into trouble, Europe still has big problems. Nevertheless, we have to be optimistic concerning the rest of 2010, though the experts say we will only see signs of improvement after the third quarter of the year.”