Thu, Jan 14, 2021 – 11:16 AM
[SINGAPORE] Japanese trading house Sumitomo plans to close its crude and fuel oil trading desks in Singapore at the end of March and will relocate the trading functions to its Tokyo headquarters, a company spokesperson said on Thursday.
The company will also exit its bunker fuel blending business in the city state, the largest global bunkering port, he said, without giving further details.
The moves, reported by Reuters on Wednesday, come after stricter emissions standards imposed by the International Maritime Organization starting 2020 reduced opportunities to compete through blending to produce bunker fuels.
Market competitiveness and company strategy, among other factors, led to the decision to downsize its Singapore operation, a source with knowledge of the matter told Reuters.
Sumitomo’s Singapore unit Summit Energy & Resources, previously known as Petro Summit, will continue its oil trading business until the end of March, and the transition will be completed in April, said the source.
Employees were told of the decision on Monday.
Sumitomo has two crude and fuel oil traders and six bunkering traders, both Japanese and local. The Japanese employees will likely relocate back to Japan, two sources said.
Summit Energy trades Australian and Middle East crude, blends and trades very low sulphur fuel oil for bunker sales.
The company plans to end a tank storage lease at Singapore’s Oiltanking Seraya terminal of 180,000 cubic metres in capacity, according to a source, who was notified of the change.
Summit Energy will continue to trade iron ore. Sumitomo Singapore, a separate unit, will handle bunker fuel sales in Singapore together with Sumitomo Tokyo after the transition is completed in April.
Oiltanking did not immediately respond to a request for comment.