- 380 HSFO bunker fuel surged to $735.39/MT, up $159.82 from last week
- Scrubber spread between HSFO and VLSFO widened to $134.33, exceeding the $100 profitability threshold
- MGO LS price briefly topped $1,300/MT, a record high since data began in 2001
Geopolitical tensions between the United States and Iran have triggered a sharp spike in global bunker fuel costs this week. The effective closure of the Strait of Hormuz, a vital oil transit route, has driven crude prices higher, immediately impacting ship operating expenses worldwide. Benchmark indices show unprecedented volatility, pressuring the entire maritime fleet.
Context and Background
The Strait of Hormuz is a strategic maritime chokepoint between Oman and Iran, handling approximately 20% of global oil shipments. Any disruption here directly and swiftly affects crude prices and, by extension, marine fuels known as bunker. The MABUX system (Marine Bunker Exchange) provides global benchmark indices for these prices, with reliable data since 2001. Similar volatility was last seen during pandemic peaks and Russia sanctions.
In-Depth Technical Analysis
Fuel prices escalated unevenly across types. Heavy fuel oil with 3.5% sulphur (380 HSFO) rose from $575.57 to $735.39 per metric ton (MT). Very low sulphur fuel oil (VLSFO), mandated by IMO 2020 regulations in most waters, jumped from $670.31 to $869.72/MT. Marine gas oil low sulphur (MGO LS), used in emission control areas (ECAs), saw the steepest increase, nearing $1,300/MT. This reflects pressure on more refined distillates, which are sensitive to supply chain disruptions.
Scrubber Economics Revived
The scrubber spread, the price difference between HSFO and VLSFO, widened to $134.33/MT. This exceeds the estimated $100/MT profitability threshold for amortising investment in an exhaust gas cleaning system (scrubber). Consequently, vessels equipped with scrubbers, which can burn cheaper HSFO, now hold a significant daily cost advantage over those reliant on costlier VLSFO.
Concrete Operational Implications
Shipping companies face immediate variable cost injections. A large container ship typically consumes 150 to 300 tons of fuel daily. A $200/MT price increase translates to an extra $30,000 to $60,000 per vessel each day. This will force route revisions, potential slow steaming (reduced speed to save fuel), and urgent reassessment of bunker adjustment factor (BAF) clauses in charter contracts. Key bunkering ports like Singapore, already reporting shortages, will experience increased delays in refuelling operations.
Impact on the Labour Market
For marine engineers and team leaders, pressure to optimise fuel consumption will intensify. Specialised training in fuel management and efficient scrubber operation becomes more valuable. Bunker brokers and logistical operators in major ports will enter a period of high activity and complex negotiation, potentially creating temporary job opportunities amidst a stressful, volatile pricing environment.
Macro Context
This crisis overlaps with an already strained global energy market. Liquefied natural gas (LNG) as fuel in Sines, Portugal, also rose, reaching $1,538/MT, while European gas storage levels remain low. Geopolitically, the situation recalls the 2019 tanker attacks. The difference now is a post-IMO 2020 market, with a fleet divided between scrubber-equipped and non-scrubber ships, amplifying the differential impact of the crisis.
Outlook
As tensions in the Persian Gulf persist, upward pressure on bunker prices will continue. Regional volatility, such as the ECA spread in Istanbul oscillating between $150 and $400, is expected to be the norm short-term. This financially benefits owners who invested in scrubbers in recent years. Conversely, shipping lines with older fleets dependent on VLSFO will see margins eroded, possibly accelerating scrapping decisions or long-term investments in new technologies and alternative fuels.
FAQ
- What is the ‘scrubber spread’ and why is it important? The scrubber spread is the price difference between heavy fuel oil (HSFO) and very low sulphur fuel oil (VLSFO). When it exceeds around $100/MT, investing in a scrubber system to use cheaper HSFO becomes cost-effective within a reasonable timeframe.
- Why did prices in Singapore rise more than in Rotterdam? Singapore is the world’s largest bunkering port and heavily relies on crude and refined product flows through the Strait of Hormuz. The disruption caused immediate local scarcity and greater volatility. Rotterdam has more diversified supply sources, including European refineries and Atlantic crude.
- How does this affect freight rates for cargo? Shipping lines will attempt to pass this cost increase to customers through bunker adjustment factors (BAF). Adjustments upwards in these surcharges are likely in coming weeks, especially on routes dependent on Asian-supplied fuel. The capacity for lines to absorb costs is limited.
Editorial Note: This article has been professionally adapted from Spanish to British English
for the WishToSail.com international maritime audience. Original article published at
QuieroNavegar.app.
