Page 70 - Demo

Another consequence of the conflict is its impact on pricing indices. Whether it comes to freight, oil, gas, or other niche products, the pricing of innumerable physical and derivative contracts across the industry is based on transactions in the Middle East. Thus, the lack of price signals since late February has been hugely disruptive for physical traders, refiners, and shipping companies.The decisions of the Baltic Exchange and S&P Global Energy Platts have had a particularly significant impact on the tanker market, with each taking different approaches to assessing certain Arabian Gulf%u2013adjacent routes. To ensure a healthy marketplace going forward, pricing agencies will need to revise their methodologies and engage in meaningful industry consultation. Without new frameworks, it will be difficult to restore pre-conflict levels of market confidence.How is digitalisation transforming chartering, vessel tracking, and supply chain transparency?Digitalisation has been a subject of intense debate for many years, and one we have looked at very closely as we run a large and complex shipping business, managing around 500 vessels at any point in time. Any small, consistent, and measurable savings in costs add up very quickly across a platform of our size. This gives us a strong incentive to invest in better tools to monitor and improve our performance.Last year, we announced a strategic alliance with ZeroNorth for voyage optimisation software. We have also established partnerships across emissions tracking and trading, chartering, analytics, and a range of middle- and back-office functions.However, the war in the Middle East is a clear reminder that shipping is first and foremost a logistics business that operates in the real world. No amount of digitalisation can replace the core skills and infrastructure needed to transport goods globally.In your view, what is the EU's role in accelerating shipping decarbonisation compared to global frameworks like the IMO%u2019s? Do you see EU regulations as a catalyst for innovation or as a source of market distortion globally?Many people view the EU decarbonisation targets as more ambitious than the IMO%u2019s, largely due to the adoption of FuelEU Maritime. While these regulations place real demands on business resources and compliance costs %u2014 and do have a tangible impact on decarbonisation %u2014 their effect on pricing and the broader market has remained limited. FuelEU Maritime has enabled some companies to invest in greener projects in Europe. However, these initiatives remain narrow in scope when considered within the global context.How do you balance sustainability goals with commercial pressures in shipping?Trafigura has always been pragmatic about its decarbonisation goals, with a view to achieving them in a sustainable and profitable way, while staying at the forefront of technical innovation. Decarbonisation has typically taken a back seat during periods of extreme market stress and disruption, including the COVID-19 pandemic, the Russia-Ukraine war, the Bab el Mandeb crisis, and now the Iranian conflict, but the focus will return to long-term decarbonisation goals once the current crisis ends.What is the role of alternative marine fuels going forward, and how do options like biofuels and ammonia fit into Trafigura's long-term decarbonisation strategy?The use of alternative fuels will continue to grow as production gradually increases and the necessary economies of scale are reached to enable their profitable and large-volume supply. The sheer complexity and volatility of the market in recent years have dampened enthusiasm around their use, particularly in the tramp shipping segment, where schedules are inherently less predictable. However, industry leaders are still keen to explore new technologies and find new solutions to address climate challenges collectively.We already use and supply biofuels, particularly through TFG Marine, our bunker procurement platform, and we are expanding the footprint of our physical trading activities across all lower-carbon products in anticipation of future growth.Freight markets70 NX