Market warned against bogus Iraq bunker fuel

The bunker fuel industry worldwide has become a victim of fuel smuggling in Iraq. Partially refined crude is being smuggled out of Iraq and sold as bunker fuel to vessel owners in the Middle East and South-East Asia.

Partially refined and adulterated crude is being smuggled out of Iraq and sold as ISO 180, one of the popular bunker fuel grades widely used by ship owners across the world.

The Coalition Provisional Authority (CPA) in Iraq passed on bunker smuggling related information to the Maritime Liaison Office (Marlo) of the US Navy in Bahrain last month and asked that it be passed on tto the shipping industry worldwide.

When contacted by Gulf News, Ian Adams, secretary-general of the International Bunker Industry Association (IBIA) in London, said: "Buying and selling smuggled oil as bunker fuel can cause extreme problems, not least from a legal point of view.

"By using fuel oil that has not passed through the proper channels, owners are running the very real risk of harming their crew and of damaging their vessels, as well as of incurring legal penalties.

"Oil products that are indiscriminately blended in backroom operations are not safe to use. They could contain contaminants or they may have an unexpectedly low flashpoint, meaning that the fuel will ignite at a lower temperature - a highly dangerous situation."

In its communiqué issued to Marlo and to the shipping industry on October 19, the CPA cautioned buyers against possible hazards in using this material as bunker fuel for vessels.

The CPA stated: "The product segregation and other quality control measures are virtually non-existent in the theft and smuggling network that delivers Iraqi petroleum products to illicit markets. Varying grades of gas oil, diesel fuel, and kerosene are mixed indiscriminately, resulting in off spec properties, particularly lowering of flash and fire points, increasing fire hazard.

"Significant quantities of products being sold as fuel oil (typically ISO 180) are, in fact, crude oil, or blends of fuel and crude oil. It is possible that the majority of smuggled "fuel oil" is actually crude or blended fuel and crude oil. Typical impurities in Iraqi crude oil can cause greatly increased wear and fouling in burner and engine fuel systems."

As Fujairah is the Middle East hub of the bunkering industry, the influx of smuggled Iraqi oil might also affect the bunker fuel market in the Middle East, said a broker in Fujairah. However, monitoring the coast and awareness among consumers is the only way to avoid the smuggled bunker fuel, he said.