Bunker fuel prices are set to hit all time high with just $10.75 per tonne away, recorded in July 2008 with shipping warned to expect high fuel bills for the duration of 2022 and into upcoming year.
Bolstered by the price of crude approaching $100 per barrel in recent days, most probably prompted higher by the conflict between Russia and Ukraine, bunker prices have been going like a shot, with a tonne of very low sulphur fuel oil (VLSFO) yesterday going for $748 in Singapore, the world’s top bunkering hub. The price gap between low and high sulphur content fuel has also increased over $200 per tonne in Singapore in recent days.
Before the collapse of Lehman Brothers and the global financial crisis in the summer of 2008, the average price for IFO 380 fuel, then the leading shipping fuel, at the world’s top four bunkering hubs averaged $739.25. Today’s VLSFO prices at the same four ports, according to Ship&Bunker, stand at $728.50 per tonne.
“The projected divergent trends in high and low sulphur marine fuels suggests that the VLSFO – 380 Cst spread could well rise widen from today’s $210/mt (basis Singapore) level going forward,” as per the predictions by the new analysis from BRS this week.
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LNG has lost its price competitiveness to marine gasoil (MGO) – and thus to a greater extent VLSFO – resulting in LNG vessel operators reducing the use of boil-off, which is more being valued as cargo, and boosting purchases of VLSFO and MGO, according to the data from Integr8 Fuels.