Bunker prices in Singapore, the world's largest bunkering hub, have risen by roughly three-quarters since the US-Iran war began on February 28. VLSFO climbed 74% and HSFO 77% over that period, pushing fuel costs for shipowners sharply higher and reshaping the economics of global freight.
In Singapore, VLSFO was assessed by ENGINE at $509 per tonne on February 27, the final trading day before the war began, while high-sulphur fuel oil stood at $432 per tonne. By Monday this week, VLSFO had climbed to $886 per tonne and HSFO to $764, increases of 74% and 77% respectively.
For an owner taking 1,000 tonnes of fuel, that equates to an additional bill of around $377,000 for VLSFO compared with the eve of the conflict. A 3,000-tonne stem costs more than $1.1m extra.
Prices initially went vertical after US and Israeli strikes on Iran on February 28 and the subsequent disruption around the Strait of Hormuz. Ship & Bunker data shows Singapore VLSFO rising from $521.50 per tonne immediately before the conflict to a peak of $1,120.50 by March 13.
No. The market subsequently retreated as supply chains adjusted and hopes periodically surfaced of a diplomatic breakthrough, but bunker prices have never returned close to their pre-war levels, and have been increasing again in recent weeks.
The bunker increase is also changing the economics of the scrubber trade. In Singapore, the absolute discount enjoyed by scrubber-fitted ships burning HSFO has widened from around $77 per tonne immediately before the war to roughly $122 today, even though the price of HSFO itself has surged.
Yes. Another risk for shipowners this year has not simply been price, but whether the right fuel is available at the right port at all. The Iran war and disruption around Hormuz have repeatedly squeezed supply into Asia and the Middle East, forcing vessels to bunker earlier, carry more fuel or divert to alternative hubs. Singapore has seen VLSFO lead times stretch into double digits, while Fujairah has at times been effectively dry for prompt VLSFO, with stocks falling to multi-year lows and only a handful of suppliers able to offer product.
The problem has spread beyond those two hubs. Tight Japanese availability, longer notice periods in northern Europe and constrained Middle Eastern supply have all featured during the year, while low inventories mean the market remains vulnerable to another disruption.
More than seven months into the war, fuel prices therefore tell much the same story as freight rates: the initial shock has passed, but the cost of disruption remains embedded in shipping. For freight forwarders and shipowners alike, this underscores the value of working within reliable, well-connected networks capable of navigating regional supply constraints as they arise.
Copyright: https://splash247.com/bunker-prices-jump-by-three-quarters-since-iran-war-began/
Mr Sam Chambers