World Bunkering > News > Summer 2011 > Turkey - Tough times

Official figures for the Turkish bunker industry are difficult to find and similarly market share statistics are not readily available. However, about 50,000 ships pass through the Bosphorus and Dardanelles every year, carrying some 400 million tonnes of cargo. Istanbul’s strategic location on the only route between the Black and Mediterranean Seas makes it the number one contender to the region’s bunker and ship supply hub. It is estimated that about 18,000 ships take bunkers and luboil at Istanbul and that annual bunker volume runs at about 1.6 million tonnes.

There are five or six major suppliers all competing for market share while demand is more or less static and new players are emerging. There are also a number of MGO supply specialists. Anadolu claims to have the largest market share and has the advantage of a floating storage facility located at the port of Ambarli close to Istanbul anchorage. Its marketing manager Cem Ozoral says the company runs a fleet of 11 owned barges.

Another long-established strong player is Petrol Ofisi (PO), which has a terminal in the same area. Other established suppliers include CYE Petrol, Energy Petrol and TBS. Lukoil and Oiltrade supply gas oil while Shell, Mobil and BP supply luboil only, and shipowner-backed Arkas Bunker, a relative newcomer to the market, has grown rapidly. Turkish-based Lukoil-Bunker Istanbul has moved from just supplying MGO and now offers IFO in Istanbul roads and Izmit Bay using a fleet of three bunker barges, while four other barges supply MGO only.

Adding to the competitive pressure the Russian oil major Rosneft is setting up a bunkering joint venture with Turkey’s Calik Holding. The president of Rosneft, Eduard Khudainatov, was quoted as saying: “I am talking about offshore bunkering, and not only in the Turkish waters, but throughout the Black Sea and near the Bosporus and the Dardanelles.” Mr Ozoral says that 270,000 tonnes of bunkers are estimated to have been delivered in the first two months of this year, about the same as in the same period in 2010.

The trouble is that last year was not a good one for suppliers. He says: “2010 was not a profitable year for anybody. Strong competition affected profit margins. Also, as everywhere in the world, Turkish bunker suppliers are affected by the global economy and the downturn in trade. I expect this crisis will continue in 2011. Tough competition will continue. Smaller buyers will have the biggest problems.

“Istanbul is heaven,” says Mustafa Muhtaroglu founder of major physical supplier Energy Petrol. He adds quickly, however: “These are not my words. It was said by a shipowner about bunkering in Istanbul. Facing many problems in other ports he described Istanbul in such a flattering way because of the high quality bunkering service provided there.”

“He is right,” says Mr Muhtaroglu, “Istanbul is one of the best supply centres in the area. It is a very well regulated and controlled supply port. Consequently we have a reliable bunker market here, which means trouble-free bunkering. Istanbul is known for having no quality or quantity claims and so is favoured by many buyers. We notice an increase in blue chip shipping companies bunkering in Turkey. Istanbul also supplies several large container lines as well as cruise ships. At Istanbul we enjoy safe seas, generally calm weather and have a good location for bunkering”.

Stressing the flexibility and service standards of the Istanbul suppliers he says: “One Saturday a European buyer called asking for bunkers on the Sunday after a supplier in one of the Black Sea ports failed to deliver. We arranged the stem in five minutes. Service and flexibility are the magic ingredient behind Istanbul’s success”. Another important point in Istanbul’s favour, according to Mr Muhtaroglu, is the competitive prices. He says the suppliers have lowered their margins to keep business. Illustrating his point he says that recently, the Istanbul price for 380 cSt was US$638 level while Fujairah and Singapore were charging over $640, and that Gibraltar’s was almost the same as Istanbul’s.

Efe Vural of trader Global Bunkers says that the Turkish bunker market has changed since 2008. He says that the new player, Arkas, has had a marked effect on the physical market. He adds: “Of course, some traders tried to cut out the suppliers and go directly to shipowners.” He says that in some cases unreliable traders did not pay the physical suppliers who had to collect their money directly from shipowners.

“The market may move up a little bit after July,” Mr Vural suggests. He concludes: “If Russia starts to export grain again and if the Arab countries can contain their political problems, the recovery could be quick.”