Rising concerns about bunker quality

Singapore-based marine fuel supply firm, Integr8 Fuels, has warned ship operators of potential bunker quality issues. In its second Bunker Quality Trends report, the firm has assessed data relating to the supply of 60 million tons of bunker fuel over six months.

Integr8’s most important finding is that ships refuelling in the Amsterdam-Rotterdam-Antwerp port range are no less than 14 times more likely to receive very low sulphur fuel oil (VLSFO) consignments with sulphur levels exceeding the mandated 0.5% maximum than ships bunkering in Singapore.

The findings come at a key moment. They follow a series of high-profile incidents in Singapore, the world’s largest bunkering port, in which around 200 ships were affected by bad bunkers in the early months of 2022. Problems included clogged pipes, blocked fuel filters, and obstructed centrifuges.   

They also precede the 2025 introduction of the next Emission Control Area (ECA) in the strategically important Mediterranean Sea, affecting many thousands of vessels. From the beginning of May 2025, ships operating across the entire ECA will have to burn fuel with a sulphur content of no more than 0.1%.  

The Integr8 report provides owners with an update on fuel quality across a range of bunkering ports. In a statement, the company said it has addressed questions such as how likely an owner may be to face off-spec bunker situations; what parameters are the most problematic; and which ports pose the greatest risks.

The company’s Bunker Quality and Claims Manager, Chris Turner commented, “Whilst fuel quality remains good overall, pockets of problems remain, and data-driven buying remains the first line of defence to proactively protect buyers against most of the issues we see in the industry. We hope this report will provide ship operators and bunker buyers with the information and tools they need to mitigate risk and make smart buying decisions.”

The increasingly complex marketplace has prompted Integr8 to provide more data for clients. A new website will provide users with data sets that should give a basis for bunkering decisions such as when, where, costs, and avoiding possible delays.

Pablo Di Nieri, CCO said, “With so many different sources of data, and, in the case of pricing, a lack of official benchmarking system, it can be difficult to determine the right buying strategy or confidently assess performance. That’s why we have teams of research analysts and technical experts monitoring the market and producing valuable resources which users can access via our new website, along with regularly updated bunker pricing and quality information.”

 

Iran stresses unity among OPEC members

Iranian President Ebrahim Raisi stressed the necessity of strengthening unity among the members of the Organization of the Petroleum Exporting Countries (OPEC) to nullify the division created by the West.

Making the remarks during a meeting with OPEC Secretary General Haitham Al Ghais, in Tehran on Saturday, in the presence of Oil Minister Javad Oji, the president said, “Some Western countries seek to create division and disagreements among OPEC member countries to secure their interests, and the OPEC members should prevent the realization of these goals by strengthening their cohesion.”

He considered the constructive cooperation of the OPEC members with each other as an important factor in the success of this international organization and added: “The Islamic Republic of Iran has always had a constructive cooperation with this organization and we are determined to continue and improve the level of cooperation.”

The president further mentioned supporting the rights of oil producers and preventing discrimination against them as the philosophy of forming OPEC, and expressed hope that OPEC can bring peace to the oil market in the new period of activity.

During the meeting with the Iranian president and oil minister, OPEC Secretary General Haitham Al Ghais stated that the Islamic Republic of Iran, as one of the founding members of OPEC, has always had useful, effective, and constructive cooperation with this organization and its members and reminded, “Iran, both at the ministerial level and at the technical level has always acted in the direction of strengthening the cohesion and unity of OPEC members.”

Describing the situation of the oil market he said, “I hope that with the unity of OPEC members and benefiting from the constructive support and cooperation of the Islamic Republic of Iran, we will be able to bring peace to the market.”

The OPEC secretary general arrived in Tehran on Friday for reviewing the oil market situation, as well as the supply and demand outlook, with the Iranian officials, and exchange of views on the upcoming meeting of OPEC members and the ministerial meeting of the OPEC Plus (an entity consisting of the 13 OPEC members and 10 of the world's major non-OPEC oil-exporting countries).

Iran has always asked fellow OPEC members to refrain from any unilateral measures, warning that would undermine the unity of OPEC.

The Islamic Republic has called on members not to take unilateral measures that would undermine the unity and independence of OPEC and provoke the US to take action against Iran.

Reacting to Iran’s approach in this regard, the former OPEC secretary general said there were no unilateral decisions in the organization.

Mohammad Sanusi Barkindo said, “Regarding the issue of Iran and the sanctions, Iran had been faced with similar challenges in recent years and I am sure that it can overcome these issues.”

“Over the 60 years since the establishment of OPEC, we have faced many challenges, but what has always helped us is the unity of member stations. If we can preserve this unity, we can overcome the problems again,” the ex-OPEC secretary general said in an interview in Tehran on the sidelines of the Iran Oil Show.

Iranian Oil Minister Javad Oji has stressed that the global energy market needs an increase in the supply of Iranian oil saying, “As a major producer of oil and petroleum products, we are always ready to play our role in maintaining global energy security away from politics.”

Speaking after an OPEC Plus meeting last September, Oji noted that the role and importance of Iran's supply of energy resources, including oil, gas, and petroleum products, is of double importance in ensuring the stability and security of the world's energy.

“We have always declared that Iran is ready to contribute to the improvement of energy security in the world by avoiding the political use of energy. The global energy market needs an increase in the supply of oil and natural gas from Iran,” the minister said.

 

Iraq launches road and rail project to link Asia and Europe

Iraq has launched a US$17 billion project on Saturday to link a major commodities port on its southern coast by rail and roads to the border with Turkey, in a move designed to transform the country's economy after decades of war and crisis.

The Development Road aims to tie the Grand Faw Port in Iraq's oil-rich south to Turkey, turning the country into a transit hub by shortening travel time between Asia and Europe in a bid to rival the Suez Canal.

"The Development Road is not just a road to move goods or passengers. This road opens the door to development of vast areas of Iraq," Farhan al-Fartousi, director general of the General Company for Ports of Iraq, told Reuters.

Iraq's government envisions high-speed trains moving goods and passengers at up to 300 kilometres (186.41 miles) per hour, links to local industry hubs and an energy component that could include oil and gas pipelines.

It would mark a significant departure from the country's existing aged transport network.

Iraq's train service currently operates a handful of lines, including slow oil freight and a single overnight passenger train that trundles from Baghdad to Basra, taking 10 to 12 hours to cover 500 kilometres.

The Grand Faw Port, which was devised over a decade ago, is halfway to completion, Fartousi said.

Passenger transport between Iraq and Europe harkens back to grand plans at the turn of the 20th century to create a Baghdad to Berlin express.

"We will make this line active again and tie it to other countries," Fartousi said, noting plans to ferry tourists and pilgrims to Shiite holy sites in Iraq and Mecca in Saudi Arabia for the Haj pilgrimage.

The project was announced on Saturday at a conference aimed at courting Arab interest, including from Arab Gulf states, Syria and Jordan. A senior government aide said regional investment was on the table.

Promises of development are long-standing in Iraq but infrastructure remains decrepit even as the government of Prime Minister Mohammed Shia al-Sudani makes a push to rebuild roads and bridges.

But officials say the Development Road is based on something new: a period of relative stability since late last year that they hope can be maintained.

If work starts early next year, the project would be completed in 2029, Fartousi said.

"Even if Iraq was absent for a year or two or a decade or two, it must return one day or another. Hopefully these days are the beginning of the return of Iraq," he said.

China-South Korea to strengthen chip industry

China and South Korea have agreed to strengthen dialogue and cooperation on semiconductor industry supply chains, amid broader global concerns over chip supplies, sanctions and national security, China's commerce minister said.

Wang Wentao met with South Korean Trade Minister Ahn Duk-geun on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in Detroit, which ended on Friday.

They exchanged views on maintaining the stability of the industrial supply chain and strengthening cooperation in bilateral, regional and multilateral fields, according to a statement from the Chinese Ministry of Commerce on Saturday.

Wang also said that China is willing to work with South Korea to deepen trade ties and investment cooperation.

However, a South Korean statement on the same meeting did not mention chips, instead saying the country's trade minister had asked China to stabilize the supply of key raw materials, and asked for a predictable business environment for South Korean companies in China.

"The South Korean side expressed that communication is needed between working-level officials over all industries", not just for semiconductors, a source with knowledge of the matter told Reuters.

The source declined to be identified because they were not authorized to speak to the media. South Korea is in the crosshairs of a tit-for-tat row between the United States and China over semiconductors.

China's cyberspace regulator said last week that Micron had failed its network security review and that it would block operators of key infrastructure from buying from the company. The US has pushed for countries to limit China's access to advanced chips, citing a host of reasons including national security.

About 40% South Korea's chip exports go to China, according to trade ministry data, while US technology and equipment are necessary for South Korean chipmakers Samsung Electronics and SK Hynix.

Deteriorating Israel-Arab relationships

Dynamics between Israel and the Arab world have taken a turn for the worse in the first few months of the current Israeli government headed by Prime Minister Benjamin Netanyahu.

The positive momentum in Israel-Arab relations, which Netanyahu himself was the key in generating through the signing of the Abraham Accords in September 2020 and which picked up pace during the Naftali Bennett-Yair Lapid government that followed, has slowed down since the Netanyahu took office in late December 2022.

Netanyahu initially sought to continue his regional achievements after taking over once again as prime minister, and Arab leaders at first played along. But this quickly changed given his government’s harsh policies and extreme statements; soon, Arab warnings to Israel and condemnations of its actions became a recurring theme.

In parallel, meetings between Israeli and Arab heads of state and ministers became increasingly rare, even though practical cooperation continued and previous understandings have mostly endured.

Under Israel’s current government, only limited progress may be feasible in Israel-Arab relations. But conditions for positive change do exist and include marginalizing Israeli extremists, avoiding a flare-up with the Palestinians, reducing the domestic turmoil in Israel, and ensuring the effective involvement of both the United States and the European Union.

Preventive diplomacy enabled the convening of two regional security summits, creating a new mechanism for engagement to increase stability. With Ramadan concluding without a flare-up, a cease-fire reached in Gaza, and domestic turmoil in Israel quieting somewhat, there is potential for renewed Israel-Arab engagement and there are already indications that this is happening.

This trend will become more significant if the United States prioritizes it. That will require Netanyahu to show greater moderation on the Palestinian issue, limit extremists in his coalition, and further backtrack on domestic democratic erosion.

The US should advance regional security summits and the Negev Forum, include a Palestinian component in Israel-Arab cooperative endeavors and normalization efforts, and encourage the EU’s recent initiative to advance a comprehensive regional peace.

 

History of Israel-Arab Normalization

Israel currently has official diplomatic ties with five Arab countries namely Egypt, Jordan, UAE, Bahrain, and Morocco.

Egypt was the first Arab state to sign a peace treaty with Israel, in 1979, in return for an Israeli withdrawal from the Sinai Peninsula it occupied in 1967.

Jordan followed in 1994, a year after Israel and the PLO recognized each other via the Oslo Accords. Progress toward Israeli-Palestinian peace enabled Israel to establish ties with other Arab states, but these were cut after the outbreak of the second intifada in 2000.

In 2020, following a gradual process, the Abraham Accords were signed, leading the UAE and Bahrain to normalize ties with Israel, with Sudan indicating it would follow suit when domestic conditions allow.

Also in 2020, Morocco re-established the official ties it had with Israel in the 1990s.

In 2022, Israel, the UAE, Bahrain, Morocco, Egypt, and the United States established the Negev Forum to advance multilateral cooperation.

Israel for decades had unofficial and secret relations with most Arab states. Israel-Arab relations traditionally have a strong security dimension, but also increasingly include civilian, economic, and political cooperation.

In 2002, the Arab League adopted the API, which promised Israel normal relations with the entire Arab world in return for peace with the Palestinians.

The API did not generate progress toward Israeli-Palestinian peace.

Currently, Saudi Arabia is seeking to update the API and possibly have it become a key part of a package of incentives for peace.

Netanyahu has repeatedly rejected the need to move forward with the Palestinians as a condition for progress with Arab countries. While he seeks to advance ties with Arab states to bypass the Palestinian issue, others in Israel and the international community seek to leverage normalization to advance Israeli-Palestinian peace.

Electronic Warehouse Receipt Financing: Still in a nascent stage in Pakistan

The Government of Pakistan (GoP) came up with an alternative delivery system for the benefit of farmers in year 2013. It is aimed at achieving financial inclusion of farmers, improve their financial conditions and on top of all achieving food security. Irony of fate was that when the program was launched there was no supporting infrastructure in the country. The work has to be started from ground zero, all the stakeholders have to join their hands and the GoP has to take the lead.

If one looks at more than one decade history, the progress is not very encouraging. On top of all hardly a few modern grains storage facilities have been constructed. Some basic questions arise, if there are no accredited storage facilities, how can the electronic warehouse receipts (ESRs) be issued? If farmers have no EWRs how can they borrow from the financial institutions?

A further probe indicates that a collateral management company has been established, it has accredited around a dozen flat-bed warehouses. However, hardly any warehouse with silos has been accredited. In the last financial year EWRs worth one billion rupees were issued and lending worth PKR700 million was made. The numbers look dismal keeping in view the size of just three crops, namely wheat, maize and rice.

Whatever EWRs have been issued were for maize and paddy, but not a single EWR has been issued for wheat. The point worth noting is that the country produces around 25 million tons wheat every year. The real cause of concern is that in the absence of modern grain storage silos, around 20% quantity goes stale before reaching the market. This is huge loss for the farmers as well as for the country.

As stated earlier, the GoP as well as the financial institutions have failed in convincing the potential investors to establish grain storage silo facilities. The point worth mentioning is that for the current financial year (FY23) State Bank of Pakistan (SBP) has fixed an indicative target of lending to farmers at PKR1.8 trillion. Against this target lending of PKR700 million against EWRs looks disappointing.

The introduction of EWRs in Pakistan is aimed at offering three options to the farmers: 1) safekeeping of commodities to avoid distress selling and post-harvest losses, 2) using EWR as collateral for borrowing from financial institutions and 3) trading of EWRs at the PMEX platform to efficiently sell the produce at a fair price.

The recent media reports indicate that at present only two commercial banks, out of more than two dozen, are running awareness sessions about lending against EWRs. These may be the banks that have lent significant amounts against EWRs. A question comes to minds what the other financial institutions are doing? It is necessary to reiterate that if there are no warehouses, no EWRs will be issued: If no EWRs are issued how the financial institutions would lend against the EWRs.

The EWR mechanism aims at improving the performance of the agricultural sector by stimulating economic growth both in the agricultural sector and also in the construction sector by creating an incentive for the private sector in constructing new warehouses. This will increase the capacity of the country to store agricultural produce without wastage, alleviating poverty and reducing shortages of agricultural produce in Pakistan.

The readers may be keen in knowing why a reasonably high amount has been lent against maize? According to the sector analysts chicken feed manufacturers has been the biggest beneficiary. They have the silos, warehouse management system, a large number of farmers/ suppliers and above all history of borrowing from the financial institutions. The lenders were comfortable in extending credit to financially strong borrowers. 

Analysts are of the view that unless an ecosystem is introduced for the storage of wheat, the efforts will not yield the significant results. However, the problem is that there are no silos. Historically the government has been the major buyer of wheat, but just does not have finances to buy more than more than 10 million tons. Almost the entire bought quantity is stored in highly inefficient flat-bed warehouses or kept in open.

A common complaint is that farmers are not ready to sell their produce to the government. However, the growers have contrary narrative. They say the government does not offer good price, there are extra ordinary delays in releasing payment and at time farmers get jittery because of fast approaching monsoon. The unscrupulous elements take advantage of the situation and force the farmers to sell their produce below the price fixed by the government.

Another narrative is that agents of neighboring country not only do expeditious buying but also pay a price which is higher than the support price fixed by the government. Soon after the purchase wheat is transferred to the ‘hideouts’. That is the reason that the government has to import wheat to meet the shortfall.

Analysts are of the view that if wheat is stored in the designated warehouses, it will be easy to monitor its movement. The borders have to be also monitored closely to contain slippage into the neighboring countries. EWR system can play a major role in not only saving large quantities going stale but also smuggling t the neighboring countries.