October’s global bunker market remained under strong geopolitical and supply-side pressure. Middle East tensions, disruptions to oil product flows, tight regional fuel availability and rising LNG prices continued to support bunker quotations.
The key market drivers included:
- Middle East Conflict: Continued instability around the Strait of Hormuz sustained elevated geopolitical risk premiums, freight costs and bunker price volatility.
• Crude Oil Supply Constraints: Disrupted Gulf oil exports, limited supply flexibility and higher transportation costs maintained upward pressure on crude and marine fuel prices.
• Tight Distillate Supply: Restricted gasoil availability and strong refinery margins continued to support MGO LS prices, widening premiums over residual bunker fuels.
• Regional Fuel Imbalances: Limited HSFO and VLSFO availability, particularly in Asian bunkering hubs, contributed to significant regional price differentials and changes in scrubber spreads.
• Higher Bunker Transportation Costs: Elevated tanker freight rates constrained fuel arbitrage flows between Europe and Asia, increasing supply pressure in major bunkering hubs.
• Rising LNG Prices: Tight global LNG supply, stronger European gas prices and seasonal demand expectations reduced LNG’s competitiveness against conventional marine fuels.
• Alternative Fuel Transition: Continued expansion of dual-fuel and battery-powered fleets supported the longer-term diversification of marine fuel demand, although high alternative fuel costs remained a constraint.
In October, the MABUX 380 HSFO Index extended its upward trend, gaining USD 76.75, from USD 701.67/MT at the end of September to USD 778.42/MT. The VLSFO Index rose by USD 70.81, reaching USD 913.07/MT compared to USD 842.26/MT a month earlier, breaking above the USD 900/MT threshold. Meanwhile, the MGO LS Index recorded only a marginal increase of USD 2.62, edging up from USD 1,521.88/MT at the end of September to USD 1,524.50/MT. The upward trend in bunker prices during October was primarily driven by the continued escalation of the military conflict between the United States and Iran, which sustained a substantial geopolitical risk premium in global crude oil and refined petroleum product prices. At the time of reporting, MABUX bunker indices remained close to their peak levels, reflecting persistent geopolitical tensions and elevated uncertainty across global energy markets.
The MABUX Global Scrubber Spread (SS) – the price differential between 380 HSFO and VLSFO – continued its moderate downward trend in October, declining by USD 5.94, from USD 140.59 at the end of September to USD 134.65, while remaining above the USD 100.00 SS Benchmark. The monthly average SS value also decreased by USD 23.78. In Rotterdam, the SS Spread increased by USD 11.00, from USD 57.00 at the end of September to USD 68.00, remaining below the USD 100.00 threshold. However, the monthly average SS value declined by USD 25.63. In Singapore, the 380 HSFO/VLSFO price differential narrowed by USD 35.00, from USD 125.00 in September to USD 90.00, falling below the USD 100.00 benchmark and briefly dropping to as low as USD 20.00 during the month. The port’s monthly average SS value also recorded a substantial decline of USD 80.33. The continued narrowing of the SS Spread suggests that the bunker market is gradually adjusting to the prevailing geopolitical environment. With scrubber spreads falling below the psychologically significant USD 100.00 threshold in key bunkering hubs, conventional VLSFO is becoming an increasingly competitive alternative to the 380 HSFO plus scrubber combination, potentially reducing the economic advantage of scrubber-equipped vessels. We expect the SS Spread to maintain a moderately downward trend in November, although geopolitical developments and bunker fuel price volatility may continue to influence market dynamics.
n October, the ECA Spread (ES) – the price differential between ULSFO and MGO LS – in Istanbul maintained its moderately downward trend, declining by USD 5.00, from USD 75.00 at the end of September to USD 70.00. However, the index experienced significant fluctuations during the month, ranging between USD 50.00 and USD 100.00. Meanwhile, the monthly average ES value increased by USD 6.25. Overall, the ECA Spread’s sustained position below the USD 100.00 threshold suggests that the market has reached a certain degree of stabilization, despite occasional short-term volatility. We expect no significant changes in the ECA Spread dynamics in November, with the index likely to remain relatively stable around its current levels.
