Marine fuel quality issues more common during regional wars

Marine fuel quality issues are more common during periods of high oil prices or regional conflicts, according to data from Veritas Petroleum Services (VPS), one of the world's largest international marine fuel testing companies.

Captain Rahul Choudhuri, the company's managing director for Asia and the Middle East, told The Straits Times that marine fuel quality problems became more common after the Iran-Iraq war in the 1980s, adding that prior to the eight-year conflict between the two oil producers, fuel quality issues were actually a rare occurrence.

"The idea of blending fuels with different (oil) products emerged out of a crisis, and based on data we have seen, historically, whenever there have been wars, crises or high prices, we witness (more) fuel quality problems emerging," he said.

The blending of components is a common practice in the marine fuel industry.

When oil prices are high, and there is a tighter supply of blending components and rising operational costs, some trading companies may be inclined to be more resourceful or creative by using cheaper solutions to help bolster bottom lines.

Higher costs of capital and tight credit are also push factors for such practices.

Such efforts to cut costs can compromise the quality of marine fuels sold to shipping lines as a result of fuel contamination.

Sailing on contaminated fuel can lead to problems such as engine and equipment failure.

VPS, which operates four laboratories in Singapore, Rotterdam, Houston, and Fujairah in the United Arab Emirates (UAE), is assisting the Maritime and Port Authority of Singapore (MPA) as it investigates contamination issues involving marine fuels sold at the Port of Singapore earlier this year.

The tainted oil, which was sold by global trading giant Glencore, was loaded at the UAE port of Khor Fakkan, the MPA said previously.

It was then shipped to floating storage facilities in southern Malaysia, where further blending took place before it was sent to storage tanks in Singapore.

Some of the oil was eventually sold to PetroChina International and ships refuelling in Singapore.

The bunker contamination affected 200 ships, of which 80 reported various issues with their fuel pumps and engines.

Traders and technical experts have said that the contamination is likely to have occurred due to the addition of cheap blended components.

VPS had been the first fuel testing company to highlight the contamination cases in a series of alerts in February and March.

"Because of the scale of testing we do worldwide on a daily basis, across all our labs, we can actually detect fuel quality epidemics in any port and in any part of the world," Mr Choudhuri said, adding that when quality issues are spotted, VPS typically issues global bunker alerts to notify its customers.

Because of the unusual nature of the contaminant that was identified in the marine fuels sold to shipowners refuelling in Singapore, the MPA had sought to run further analysis on the tainted oil.

A series of exhaustive tests conducted at the VPS laboratory in Singapore helped investigators to determine the common characteristics of the marine fuel samples in question, which then allowed MPA to eventually link the tainted oil to the original source - a Panama-registered tanker that loaded the oil at a deep-water offshore anchorage off the port of Khor Fakkan some time last December.

Mr Choudhuri said the screening technology used to conduct the analysis at the company's facility here is similar to that used by the World Anti-Doping Agency to detect the presence of banned performance-enhancing substances in the blood samples of athletes competing at major sporting events such as the Olympics.

He noted that this is a complicated test, and likens the "fingerprint analysis" to searching for a needle in a haystack. The fingerprinting is described as the unique characteristics found when analysing an oil sample.

Mr Choudhuri, who has been involved in the marine fuel industry for 30 years, said investigations on marine fuels are a routine part of the services offered by VPS, which supports more than 1,000 customers and services about 13,000 ships annually.

"We have been running these tests for many years. This is not new; we do this daily to make sure that our customers are always protected."