The Azeri state-owned oil trader will also make its Singapore office fully responsible for developing its crude oil trading business in Asia, including increasing its market share, particularly via term contracts, Arzu Azimov, vice-president of trading and operations, said in an interview with Reuters.

The expansion will also see Socar Singapore arbitraging fuel oil from West to East and supplying marine fuels in the world’s largest bunkering port as well as securing oil storage facilities.

“We want to move more arbitrage fuel oil from West to East… and are looking to start a bunkering business in Singapore,” he said.

The company currently trades around 200,000 tonnes of fuel oil a month, mainly in the West, but plans to increase this volume by sourcing greater quantities of the residual fuel from refineries in the Mediterranean, Azimov said.

It will also meet oil storage operators in Singapore this week to discuss leasing capacity as part of its plan to supply marine fuel.

Socar earlier made an investment to build a 650,000 cubic metre oil storage terminal in the United Arab Emirates port of Fujairah, expected to be operational in about 18 months.

The trader is already supplying naphtha as feedstock to petrochemical makers in Europe, and plans to supply the refined product to Asian buyers.

“From time to time we are long on naphtha, we will probably expand our business in Singapore,” he said.

The Singapore office also plans to trade in the oil swaps market in the future as a tool to hedge its physical volumes.

“We are active in the swaps market, but it is all done out of Geneva. Eventually, Singapore will do it for themselves,” said Azimov.

“At this stage we do it purely for hedging, we do not take positions for speculative trading,” he added.