Hin Leong woes have 'no serious impact' on Singapore's oil trading, bunkering, say 3 govt agencies

OIL trader giant Hin Leong Trading's debt woes will have "no serious impact" on Singapore's oil trading and bunkering sectors, with the banking system also remaining sound, said three government agencies in a joint statement on Tuesday night.

In response to media reports, Enterprise Singapore (ESG), the Maritime and Port Authority of Singapore (MPA) and the Monetary Authority of Singapore (MAS) said that they are monitoring developments related to Hin Leong and the broader oil trading and bunkering sectors.

Singapore's oil trading sector "remains resilient, notwithstanding the challenges posed by the drop in global demand for energy" and is sufficiently diversified with more than 130 significant companies that trade energy products, said ESG.

It noted that although Hin Leong is related to UT Singapore Services Private Limited, which owns Universal Terminals by common shareholdings, Universal Terminals is operated independently of Hin Leong.

"Besides Universal Terminals, there are other independent oil terminal operators in Singapore including Vopak, Oiltanking and Tankstore," added the statement.

MPA, on its part, has assessed that there will be no serious impact on Singapore's bunkering industry, but added: "There may be some short-term minor disruptions due to the lapse of contractual obligations by Ocean Bunkering Services and Hin Leong Marine International."

Singapore's bunkering sector is well diversified with 43 other licensed bunker suppliers, including Minerva Bunker and TFG Marine, which recently received their licences.

"ESG and MPA will continue to work with stakeholders to ensure that Singapore's supply chain for oil products and bunkering operations continues to function without disruption," said the statement.

MAS is in close contact with the banks on developments related to Hin Leong, "and has reminded the banks not to de-risk indiscriminately from the bunkering and oil trading sectors".

"The banks are well capitalised and diversified in their exposures to these sectors," said the statement. "MAS is also closely monitoring liquidity and credit conditions in the market which, on the whole, continue to be supportive of households and businesses."