Thu 29 Nov 2012, 13:07 GMT

Relationships and trust key to managing counterparty risk


Møller says industry must be wary of developing a 'too scientific' approach, which may stifle deals and progression.



Dynamic Oil Trading, the new global trading company for marine fuels and lubricants, headquartered in Singapore, today highlighted the importance of developing close relationships as a means of managing counterparty risk.

“Liquidity and credit are the single biggest issues within the shipping industry when it comes to fuel supply,” said Lars Møller [pictured], CEO, Dynamic Oil Trading.

“Being able to provide the best credit terms is a considerable differentiator for a fuel supplier, but it has to be done based on a trustworthy relationship between the supplier and the customer. Due diligence as well as access to financial information is clearly vital, but the foundation for obtaining this is trust,” continued Møller.

As liquidity becomes tighter, Dynamic Oil Trading says ensuring the financial viability of those partners operating in the fuel supply chain is of paramount importance. However, the company believes there has to be a balance between forensic analysis that stifles deals at one end of the spectrum, versus a simple 'handshake', which could threaten business continuity.

“Dynamic Oil Trading is in a fortunate position, as we have the financial backing, liquidity and capital that enables us to provide customers with the best credit terms on deals. Understanding counterparty risk is critical, but we must be careful that it does not become too scientific, which threatens deals. Of course, where a company is not financially viable, you walk away, but in conjunction with sensible due diligence and financial analysis, we believe that building close, personal and trustworthy relationships must be the foundation of validating counterparty risk," said Møller.


United LNG I bunker vessel alongside Blue Aspire vessel. Titan charters 8,000-cbm LNG bunker vessel for ZARA region operations  

United LNG I to deliver LNG and bio-LNG across Amsterdam, Rotterdam, Antwerp and Zeebrugge ports.

Flag of Mauritania. Peninsula begins physical bunker supply operations in Mauritania  

Marine fuel supplier operating two barges following licence award from the Mauritanian National Hydrocarbons Commission.

X-Press Cassiopeia vessel. PuriFire Energy signs biomethanol supply deal with X-Press Feeders  

Letter of intent covers up to 15,000 tonnes annually for feeder carrier’s fleet.

Alan Yang and Yujin Kang, Flex Commodities. FLEX Commodities opens Seoul office with new Korea leadership team  

Dubai-based trader establishes South Korea presence with appointments of Alan Yang and Yujin Kang.

Eng. Sulaiman Ali Al Hadhrami, O Bunkering. O Bunkering appoints Sulaiman Alhadhrami as chief executive officer  

Omani bunker supplier names new CEO to lead growth and expansion in the maritime sector.

Shore power system. Zhoushan expands shore power infrastructure as part of emissions reduction drive  

Chinese port city reports 30% increase in shore power usage across terminals and berths.

Hamburg Express vessel. Hapag-Lloyd and Kuehne+Nagel partner on biofuel initiative for Asia-Europe trade  

Agreement covers 3,300-teu using waste-based biofuels, targeting a 2,979-tonne CO₂e reduction in 2026.

Rendering of a tug vessel. Berg Propulsion to supply electric propulsion systems for India’s green tugs  

Swedish firm to provide thrusters and electrical integration for two 60-tonne bollard pull battery-electric vessels.

Singapore skyline with Merlion and central business district. World Fuel seeks marine fuel supply executive in Singapore  

Role to manage supplier relationships and source marine fuel across South-East Asia and Australia-New Zealand.

OOCL Wisdom naming ceremony. OOCL names first methanol dual-fuel vessel  

Orient Overseas Container Line christens OOCL Wisdom, dubbed the world’s largest methanol dual-fuel container vessel.