Bunker price crosses $1,000 per tonne in key ports

Low sulphur bunker costs rose by $100 per ton on Wednesday (09/03/2022), having risen by a third since the end of February to almost $1,000 per tonne, adding millions of dollars to the cost of running a ULCV on a round-trip from Asia to North Europe. As a consequence of a strong surge in oil and gas prices in the early Monday trade, VLFSO prices have reached new highs.

Brent crude reached a record high of $139 per barrel before falling back, while gas prices reached a new high of 800p per therm, well surpassing the previous high of 485p per therm. Fujairah is the first major bunkering port to cross the $1,000 mark according to figures from Ship&Bunker. 

Corresponding VLSFO prices in Singapore also surged to $981 per tonne having eased back to $892.50 on Friday. The bunker price in Singapore crossed the $1,000 per mark on Wednesday morning (09/03/2022) as the market braces for yet higher oil prices. 

With a Russian oil ban "on the table" as sanctions are ratcheted up in the aftermath of Ukraine's invasion, traders anticipate oil will exceed $200 per barrel by the end of the month, more than double the price at the start of the year.

Scrubber-fitted vessels save close to $250 per tonne

As per Ship&Bunker statistics, the price differential between VLSFO and heavy fuel oil widened further last week, benefiting owners who installed scrubbers. The global average of VLSFO prices in 20 bunkering ports jumped by 12% to $962.50 per tonne on Monday. 

In the meantime, heavy fuel oil prices shot up to $714.50 per barrel, representing a marginal gain of less than 11% on a global basis. The average price difference between VLFSO and HFO is $248 per tonne, leading to considerable cost savings for scrubber-equipped ships.

Brent oil had fallen back to $122.50 by late afternoon London time on Tuesday (08/03/2022), while West Texas Intermediate was hovering at $117.50.

According to experts, the day’s high volatility was a clear indicator of serious concern about the global energy landscape. The widespread consensus is that prices will continue to rise, posing a significant risk to the global economy this year.