September’s bunker market was driven primarily by geopolitical and supply-side factors. Middle East uncertainty, reduced Gulf and Russian product flows, and tight distillate and VLSFO supply supported prices, while weaker global oil demand expectations partly offset upward pressure. The key market drivers included:
- Middle East conflict and Strait of Hormuz. Supply and shipping disruptions kept the geopolitical risk premium elevated, driving bunker market volatility and briefly pushing Brent above USD 110/bbl.
- Tight crude supply. Lower Gulf output and falling global inventories increased supply pressure and reduced market buffers.
- Persistent distillate tightness. Diesel and gasoil remained among the strongest parts of the barrel. Gulf diesel/gasoil exports stayed substantially below pre-conflict levels, while refinery capacity elsewhere struggled to compensate. This provided particularly strong support to MGO LS bunker prices.
- VLSFO blending-component constraints. Strong distillate margins increased competition for low-sulphur blending components, limiting VLSFO availability and supporting VLSFO prices relative to crude and HSFO.
- Regional bunker supply imbalances. Physical availability differed significantly between major hubs, producing substantial deviations between market bunker prices and underlying benchmark values. By Sep. 30, MABUX MDI showed all four major hubs—Rotterdam, Singapore, Fujairah and Houston—underpriced in the MGO LS segment, while regional differences persisted for HSFO and VLSFO.
- Higher European compliance costs. RED III requirements increasingly affected Northwest European bunker economics. In Rotterdam, higher compliance costs weakened competitiveness versus neighboring ports such as Antwerp and Hamburg and contributed to shifts in bunker demand.
- Rising LNG bunker prices. LNG strengthened during September as European gas prices moved higher amid tighter LNG supply and concerns over relatively low European storage levels. This reduced LNG’s price competitiveness against conventional bunker fuels in several locations.
By the end of September, the 380 HSFO index had increased by $79.31, from $622.00/MT at the end of August to $701.31/MT. The VLSFO index rose by $69.36, reaching $845.00/MT compared with $775.64/MT at the end of August. The MGO LS index posted a sharp increase of $167.28, climbing from $1,349.80/MT at the end of August to $1,517.08/MT. The steep rise in bunker quotations in September was driven primarily by a new wave of escalation in the military conflict between the United States and Iran, which significantly increased the geopolitical risk premium embedded in crude oil and oil product prices. At the time of writing, bunker indices were trading close to their peak levels.
The MABUX Global Scrubber Spread (SS) — the price differential between 380 HSFO and VLSFO — continued to narrow in September, declining by $9.95, from $153.64 at the end of August to $143.69. The monthly average, however, increased by $3.75. In Rotterdam, the SS Spread contracted by $55.00, from $120.00 at the end of August to $65.00, falling below the $100.00 SS Benchmark. The monthly average decreased by $24.54. In Singapore, the 380 HSFO/VLSFO price differential narrowed by $27.00, from $152.00 in August to $125.00, while the port’s monthly average declined by $30.84. The continued narrowing of the SS Spread indicates a gradual stabilization of the market and its adaptation to the prevailing geopolitical environment. At the same time, a potential decline below the psychological $100 threshold could negatively affect the economic attractiveness of using high-sulfur 380 HSFO in combination with scrubbers compared with conventional VLSFO. We expect the SS Spread to maintain a moderate downward trend in October. More detailed information is available in the “Differentials” section at mabux.com.
By the end of September, the ECA Spread (ES) — the price differential between ULSFO and MGO LS — in Istanbul shifted into a phase of moderate contraction, declining by $50.00, from $125.00 at the end of August to $75.00, thereby falling below the psychological $100 threshold. The monthly average decreased by $85.17. Overall, the ECA Spread has begun to show signs of gradual narrowing, suggesting a relative stabilization of the market. We expect the ECA Spread dynamics to see no substantial changes in October. More detailed information is available in the “Differentials” section at mabux.com.
Europe is heading into winter with gas storage levels among the lowest in the past two decades. Middle East tensions have disrupted LNG supplies from Qatar, pushing gas and LNG prices sharply higher in Europe and Asia while intensifying competition for cargoes that can avoid geopolitically sensitive maritime chokepoints. Despite already elevated price levels, LNG still has significant upside potential, with prices potentially rising by around one-third. Low European inventories, limited supply flexibility and strong competition between European and Asian buyers for spot LNG cargoes are expected to keep the market under upward pressure through the winter season.
As of September 28, gas storage levels in European underground facilities continued to rise moderately, reaching 71.16% of total capacity, up 6.43 percentage points from 64.73% at the end of August. Storage levels were also 9.70 percentage points above the level recorded at the beginning of the year (61.46%). The European gas benchmark TTF was virtually unchanged by the end of September, edging down by just EUR 0.004/MWh, from EUR 69.809/MWh at the end of August to EUR 69.805/MWh. However, the relatively stable month-end result masked significant intra-month volatility, with TTF quotations surging to as high as EUR 82.500/MWh during September.
The price of LNG as bunker fuel in the port of Sines (Portugal) continued to rise in September, gaining USD 123 to USD 1,608/MT, compared with USD 1,485/MT at the end of August. At the same time, the price differential between LNG and conventional bunker fuel remained in favor of conventional fuel but narrowed significantly to USD 28, versus USD 80 in August. At the end of September, MGO LS was quoted at USD 1,580/MT in the port of Sines. More detailed information is available in the LNG Bunkering section at mabux.com.
By the end of September, the MABUX Market Differential Index (MDI) — the correlation between market bunker prices (MBP) and the MABUX Digital Bunker Benchmark (DBP) — showed the following trends across the world’s four major bunkering hubs: Rotterdam, Singapore, Fujairah and Houston.
In the 380 HSFO segment, Fujairah remained the only overvalued port, although its premium narrowed by 15 points, bringing the MDI closer to the 100% MBP/DBP correlation mark. The other three ports stayed in the undervalued zone. Average weekly discounts widened by 44 points in Rotterdam, 15 points in Singapore and 18 points in Houston. Houston’s MDI exceeded the $100 mark.
In the VLSFO segment, Singapore returned to the undervalued zone, joining Rotterdam and Houston. Average undervaluation levels widened by 17 points in Rotterdam, 71 points in Singapore and 46 points in Houston. Fujairah remained the only overvalued port, with its premium increasing by 13 points.
In the MGO LS segment, all four ports stayed in the undervalued zone. MDI levels declined by 101 points in Rotterdam and 17 points in Fujairah, while increasing by 72 points in Singapore and 17 points in Houston. MDI values in Rotterdam, Singapore and Houston exceeded the $100 mark.
Overall, the overvaluation/undervaluation balance across the key global bunkering hubs saw no substantial changes in September, with undervaluation continuing to dominate across all three fuel segments. The most notable shift was Singapore’s return to the undervalued zone in the VLSFO segment. Significant MBP/DBP differentials, exceeding $100 in several ports, indicate a persistent imbalance between market bunker prices and the MABUX digital benchmark. In October, we expect MDI dynamics to remain mixed, with an overall predominance of undervaluation amid continued geopolitical tensions in the Middle East.
More detailed information on the correlation between market bunker prices and the MABUX digital benchmark is available in the “Digital Bunker Prices” section at mabux.com.
Other Global Bunkering Trends
- Port emissions: New UCL research indicates that around 10% of global shipping GHG emissions occur within port areas, highlighting ports as an important focus for maritime decarbonization measures.
- Nuclear propulsion: NEMO is advancing regulatory, insurance, liability and port-readiness frameworks for maritime nuclear power. Initial deployment could focus on fixed-route and ice-class vessels, as well as energy-intensive offshore operations, while several major industry players are already assessing nuclear propulsion and onboard power applications.
- Low-emission fuels: DNV estimates that bunker demand for low-emission fuels could be more than five times higher by 2050 under a global IMO regulatory framework. However, delays and proposed revisions to the IMO Net-Zero Framework continue to create uncertainty over the pace of the fuel transition.
- LNG and ammonia: DNV expects the global LNG bunker vessel fleet may need to more than double by 2030 to meet rising demand from LNG-fuelled ships. At the same time, LNG bunkering infrastructure, operational expertise and safety standards could provide a foundation for the future development of ammonia bunkering.
The global bunker market is expected to stay volatile in October, with geopolitical developments in the Middle East and the Strait of Hormuz remaining the key drivers. Tight crude and distillate supply, low inventories and regional bunker availability constraints should continue to support prices, particularly for MGO LS. At the same time, weaker global oil demand and a gradual recovery in Gulf flows could limit further upside. Overall, MABUX expects a moderate upward trend in October, while any further geopolitical escalation remains the key upside risk.
Source: By Sergey Ivanov, Director, MABUX
