The Oil Price Development & the Impact on the Off Shore Industry

October 12, 2015

We know there has been a lot of publications about the dramatic fall of the oil prices and the impact on the off shore industry.

We as Hamburg Trading House and Shell Marine Lubricants Distributor do feel the heat as well.  Although it looks like the Middle East has the least impact on off shore vessel utilization rates which is said to be around 90 % but with Charter rates fallen around 30% in average. In other parts of the world the utilization is said to be only around 60% and Charter rates have fallen between 30 – 60 %.

At this moment no one knows when oil prices would start to recover in a dimension that the oil majors would start to invest again in postponed or cancelled off shore project. And even then, the question remains if the utilization and charter rates will ever come back to earlier ones keeping in mind the overcapacity which has been built up in the past years.

This leaves companies like ours also with a massive task to adjust cost and operations to the shrinking demand on marine lubricants and greases for our customer off shore vessels. But without compromising on quality and speed of service.

Our clients are forced to lay up vessels and also to reduce staff in order to cope with the cost compared to the decreased income. We have more than 300 customers in the Middle East region of which many are doing business in the off shore industry.
We are meeting customers every day of the week and we have held a technical seminar in September this year in which we shared with our customers how the lubricants consumption onboard their vessels can be adjusted to the optimum. Means drain oil intervals can be extended but the wear and tear should not go up at the same time.

There are several possibilities, depending on the type of engine and its “modus operandi” how to reduce the oil consumption but not increasing the risk of a fatal engine failure.

If customers decide to look into the possibility of extended oil drain intervals we recommend to do this always together with experts like us. There is a need of monitoring the oil quality on regular basis in order to define how far can the oil change be stretched. This requires regular “sampling” and the interpretation of the sample results. Means how good is the remaining Base Number, the water content and the metal content. With the Hamburg Trading House Team backed by the Shell Marine experts we can support the extended lifetime of the oil.

In addition we are offering On Board Test Kits. So even if your vessel operates at a remote location with difficult or no access to Laboratories to do the necessary used oil analysis we can help you with the On Board Test Kits which give you and immediate feedback on the oil quality.

Another way of saving money could be the reduction of own lubricants stocks. Many of our customers used to have a buffer stock on site for short notice supplies to their vessels.

Hamburg Trading House can supply for instance at all UAE ports within 3-4 hours after order. So we are helping our customers to decrease their capital employed.

Our message to the shaken ship owners in the off shore industry is : Talk to us as your supplier. Let us find a way how we can optimize your spending on lubricants. It is in our interest that ship owners come through this heavy weather and  that we can grow together once we have come through the storm.

Hamburg Trading House is an authorized Shell Marine lubricants distributor in the UAE. In addition to Shell Marine Products, they are representing Tribomar in the United Arab Emirates for their Oil Management Systems and Tribomar Test Equipment. Hamburg Trading House is focusing on Marine business only offering its customers outstanding services at competitive prices.