With Russian tanks entering eastern Ukraine yesterday, bunker prices have hit an all-time high.
Back in the summer of 2008, a couple of months ahead of the collapse of Lehman Brothers and the global financial crisis, the average price for IFO 380 fuel, then the dominant shipping fuel, at the world’s top four bunkering hubs averaged $739.25 per tonne. Today’s low sulphur fuel (VLSFO) prices at the same four ports – as tracked by Ship&Bunker – stand at $741. At Singapore, the world’s largest bunkering hub, the price for low sulphur fuel hit $758 per tonne with the price gap to high sulphur fuel staying stubbornly above $200 per tonne.
Bunker prices for VLSFO have been climbing for many months and today stand 57% higher than they were 12 months ago.
With refiners prioritising gasoline and diesel production over bunkers because of strong demand, analysts are anticipating VLSFO prices could rise further.
Moreover, the price of crude, touching $100 a barrel, is predicted to remain at elevated prices for most of 2022.
Oil prices could be set for a “prolonged period” above $100 a barrel over the next six to nine months, with the world setting fresh demand records this year, Vitol Group CEO Russell Hardy told Bloomberg yesterday.