During Week 22, global bunker indices continued to rise amid the ongoing military conflict in Ukraine, according to Sergey Ivanov, director of Marine Bunker Exchange (MABUX).
The 380 HSFO index rose to US$760.72/mt and the VLSFO index climbed to US$984.65/mt. On 1 June, the VLSFO index reached its historical maximum of US$1045.49.
The MGO index also showed a significant growth: plus US$80.60 to US$1317.05 /mt. “Uncertainty in the global oil and bunker markets provokes a further rise in bunker prices,” pointed out Ivanov.
As for the Global Scrubber Spread (SS) weekly average, the price difference between 380 HSFO and VLSFO, continued its firm growth over the week – plus US$26.98 (versus US$241.13 last week), reaching US$284.77 on 1 June and setting a new all-time high mark.
At the same time, in Rotterdam, the SS Spread’s average value rose less significantly to US$189. The most significant average price difference 380 HSFO/VLSFO rebounded in Singapore: US$411 (plus US$133.67 compared to the previous week), and on 1 June it reached its all-time high mark of US$490.
“The sharp rise in SS Spread values has further increased the relevance and popularity of scrubbers,” commented Ivanov.
The partial embargo on Russian oil imports pushed gas prices in Europe further up. The price for LNG as bunker fuel in the port of Sines (Portugal) rose on 30 May by another US$18.
Meanwhile, LNG prices are still significantly higher than those of traditional bunker fuels: for comparison, the MGO LS price index at the port of Sines was quoted at US$1399/mt as of 1 June.
Over week 22, the most significant change in MDI index weekly average (comparison of MABUX market bunker prices vs MABUX digital bunker benchmark) was the transition of 380 HSFO fuel at the port of Singapore to the undercharge zone: minus US$40. In other selected ports, this type of fuel remained overvalued: Rotterdam – plus US$17, Fujairah – plus US$4 and Houston – plus US$42.
VLSFO fuel grade, according to the MDI, remained overpriced at all selected ports: plus US$15 in Rotterdam, plus US$170 in Singapore, plus US$105 in Fujairah and plus US$48 in Houston.
Here, the MDI index did not have any firm trend: down in Rotterdam, but up in the other three ports. VLSFO fuel remains the most overvalued segment in the global bunker market, according to MABUX report.
Regarding the MGO LS, MDI also recorded an overpricing of this fuel over the week in three out of four ports selected: in Singapore, there was a 100% correlation between market and benchmark prices. In other ports: Rotterdam – plus US$3, Fujairah – plus US$178 and Houston – plus US$30. The overcharging gradually decreased.
Geopolitical instability related to military conflict in Ukraine and rising bunker prices caused petroleum tanker rates for routes originating in Europe to rise to record highs in April 2022, according to the US Energy Information Administration (EIA).
Rates for dirty tankers – those that mostly carry crude oil, but also haul high-sulphur petroleum products such as residual fuel oil – for Aframax-sized vessels originating in the Black Sea in southeast Europe increased to US$32.10 per metric tonne (mt) in April 2022, more than triple the US$10.11/mt price in January 2022. The tanker rates for routes originating in the Baltic Sea in northern Europe reached US$41.38/mt in April 2022, up from US$7.50/mt in January 2022.
The high-cost tanker rates in the Black Sea include higher insurance risk premiums due to the sea borders Ukraine and Russia. EIA also highlighted increased bunker fuel costs, which affect both dirty and clean tankers – those that carry lower-sulphur petroleum products, including refined petroleum products such as motor gasoline, diesel fuel, jet fuel, and naphtha – rates.
Continued uncertainty in the global bunker market, sanctions imposed on Russia in the energy sector and, as a result, a sharp increase in crude oil prices remain the main drivers for bunker indices’ uptrend.
“We expect bunker fuel prices to continue rising next week,” concluded Ivanov.
