In the latest edition of Bunkerspot, firm Principal Steve Simms explained the latest post-truth challenges to the bunkering industry in the context of recent world events, including the election of President Donald J. Trump and the U.K. vote for “Brexit.”. He cautions that while the bunkering world embraces electronic information sources in the place of personal relationships and first-hand knowledge, there is greater potential for theories or expectations of changes in the bunkering world to cloud our understanding of the present realities.
For instance, although there may be a general belief that oil prices will return to the levels of $60 per barrel or more, the evidences suggests that the 2015 fall in crude prices was predated by other dips in prices to $45 per barrel or lower in present U.S. dollars. This means that the crude oil price fall was not unprecedented and actually should not have been met with such surprise. In addition, the present industry emotion or belief that fuel prices and freight rates will rise because of increased demand for fuel does not comport with the reality that container and bulk markets currently have significant overcapacity.
The 2020 worldwide .5% sulphur content cap has also been the subject of post-truth emotion and belief in that the general industry belief is that there will be sufficient good quality compliant fuel to meet the standards. However, the reality is that there are many marine and petroleum industry changes needed, including that refining capacity must be increased, before there can be uniform 2020 .5% compliance
Recent challenges in the bunkering industry serve as a good reminder of factual lessons from post-truths in the bunkering industry. It is more crucial than ever to insist on finding out the actual truth rather than relying on emotions or beliefs. History is bound to repeat itself in the bunkering world, so keeping past events in present mind is important in dispelling beliefs that the unthinkable, such as the Hanjin insolvency or the OW collapse, will not happen again. Finally, having direct, personal relationships with your counter-parties who share your commitment to integrity can help you to get to the truth of a situation before it costs you down the line.
If you are interested in reading more about the role of post-truths in the bunkering industry as it faces new challenges, a full version of the article is available here.
For information and advice on navigating the upcoming developments in the bunkering industry, contact J. Stephen Simms.