It’s not just the price of diesel, gasoline and jet fuel that’s way up. The price of the marine fuel consumed by the world’s container ships, tankers and bulkers is breaking records.
The price of very low sulfur fuel oil (VLSFO) – the 0.5% sulfur content fuel that powers most commercial ships – just exceeded the price spike that occurred soon after Russia’s invasion of Ukraine.
According to data from Ship & Bunker, the average VLSFO price at the world’s top 20 bunker (marine fuel) ports was $1,042 per ton on Wednesday, double its price a year ago. (The previous record was $1,040.50 per ton on March 9.)
In January 2020, the IMO 2020 rule required ships to switch to VLSFO (or even more expensive marine gas oil) unless they had exhaust gas scrubbers or burned liquefied natural gas. Ships with scrubbers could continue to use cheaper high sulfur fuel oil (HSFO) with 3.5% sulfur content.
According to Ship & Bunker data, the average top-20-ports spread between VLSFO and HSFO jumped to a record $314.50 per ton on Jan. 7, 2020, amid the IMO rule transition. The spread then collapsed during the first year of COVID, sinking to a mere $45 per ton on Nov. 2, 2020. At that point, multi-million-dollar investments in scrubbers looked like a mistake.
Read more in an article from American Shipper.