In March 2024, the average monthly price of very low sulfur fuel oil (VLSFO) stood at 664.5 U.S. dollars per metric ton. The price of VLSFO is strongly influenced by external factors, such as the price of crude oil and market forces of supply and demand. In the past two years, two separate events have had a profound effect on the price of VLSFO: the International Maritime Organization (IMO) sulfur cap on fuel oil in 2020 and, more recently, the Russian invasion of Ukraine and the Israeli invasion of Gaza.
Effects of the 2020 IMO sulfur cap
In January 2020, a new limit on the sulfur content in fuel oil was introduced by the IMO. The goal of the cap was to reduce the concentration of sulfur in the air, thus reducing air pollution and preventing harm to marine ecosystems as well as protecting human health. Ship operators were forced to switch to VLSFO to comply with the new regulation, leading to a higher demand for VLSFO which in turn caused the price of VLSFO to increase to 649 U.S. dollars per metric ton in January 2020.
Shortly afterward, the world was hit with the outbreak of the COVID-19 pandemic. With production facilities shutting down worldwide, maritime transport considerably slowed, driving the price of VLSFO to a historic minimum of 251 U.S. dollars per metric ton in April 2020.
Escalating conflict in Ukraine could raise fuel prices
After the Russian invasion of Ukraine in February 2022, most of the West reacted by imposing sanctions on Russia to weaken its economy. Although vital for the Russian economy, the Russian oil industry remained untargeted by direct sanctions during the first days of the invasion. However, sanctions cutting off Russia’s access to international financial markets and the SWIFT payment system, as well as divestments of Western oil companies from the Russian oil industry, could severely impact the country’s oil sector. In 2020, Russia was the third-largest producer of crude oil in the world, accounting for about 12 percent of the world’s crude oil production. Disruptions to the Russian oil industry could, therefore, have consequences for the supply of oil to the global market and drive prices up. Since crude oil is the main component of VLSFO, an increase in the price of crude oil will most likely lead to a rise in the price of VLSFO.
FAQs
In March 2024, the average monthly price of very low sulfur fuel oil (VLSFO) stood at 664.5 U.S. dollars per metric ton. The price of VLSFO is strongly influenced by external factors, such as the price of crude oil and market forces of supply and demand.
What is the current price of bunker fuel? ›
World Bunker Prices
| Port | Price $/mt | Change |
|---|
| Global Average Bunker Price | 717.50 | -0.50 |
| Americas Average | 769.50 | -0.50 |
| APAC Average | 709.50 | -0.50 |
| EMEA Average | 671.50 | 0.00 |
10 more rowsLow Sulphur Furnace Oil LSFO at Rs 49/kg | Furnace Oil in Bahadurgarh | ID: 2850008936748.
What is the price of ultra low sulfur fuel oil? ›
Basic Info. US Gulf Coast Ultra-Low Sulfur No 2 Diesel Spot Price is at a current level of 2.59, down from 2.614 the previous market day and up from 2.583 one year ago.
What is the price of sulphur fuel oil? ›
Low Sulphur Fuel Oil, Grade Standard: Industrial Grade, Packaging Size: Tanker at Rs 50/litre in Hapur.
Where is the cheapest fuel in the world? ›
Venezuela is the world's cheapest country to buy petrol, where amazingly it costs just 2 pence (GBP) a litre. This is because it's home to some of the biggest oil reserves in the world. But it's also a country where income is very low too.
What is the cheapest fuel in the world? ›
Here are the 10 cheapest countries on Earth to fill a gas tank.
- Venezuela — $0.18 per gallon. ...
- Saudi Arabia- $0.48 per gallon. ...
- Libya — $0.54 per gallon. ...
- Turkmenistan — $0.72 per gallon. ...
- Bahrain- $0.78 per gallon. ...
- Kuwait — $0.84 per gallon. ...
- Qatar — $0.90 per gallon. ...
- Egypt — $1.14 per gallon.
Fuel oil with maximum Sulphur of 0.1% is called ULSFO — less than 0.5% is VLSFO, less than 1% is LSFO and less than 3.5% is HSFO. VLSFO can be produced by blending ULSFO with LSFO or MGO with LSFO, and LSFO is produced by hydrotreating or hydroprocessing residual fuel oil.
Is vlsfo heavy fuel oil? ›
Hence the name Heavy Fuel Oil (HFO). The same product is also known by the technical names as Number 6 Fuel Oil (Bunker C) as well as Very Low Sulfur Fuel Oil (VLSFO). Names also used interchangeably include Fuel Oil, Heavy Oil, Marine Fuel, Furnace Oil, Marine Heavy Fuel Oil, Bunker Oil, Bunker Fuel.
What is the price of oil? ›
| WTI Crude | 82.45 | -0.83% |
|---|
| Gasoline •2 days | 2.692 | -0.66% |
| Louisiana Light •2 days | 87.12 | +0.03% |
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3 more rowsLow Sulphur fuel oil has a low lubricity and can contain contaminants. Due to its low lubricity pumps can suffer from a type of wear called adhesive wear where pump internal parts stick accelerating wear.
Is Mobil diesel ultra low sulfur? ›
Mobil Diesel Efficient with ultra-low sulfur level is compatible with today's advanced emission after treatment systems including Diesel Oxidation Catalyst (DOC), Diesel Particulate Filter (DPF), Exhaust Gas Recirculation (EGR), and Selective Catalyst Reduction (SCR) and Lean NOx Trap (LNT) technologies.
Is all diesel ultra low sulfur now? ›
All highway diesel fuel supplied to the market be ULSD; and. All highway diesel vehicles must use ULSD.
What is Vlsfo fuel? ›
Very Low Sulphur Fuel Oil (VLSFO) are fuels with a sulphur content not exceeding 0.50% S. 3. Ultra Low Sulphur Fuel Oil (ULSFO) are fuels with a sulphur content not exceeding 0.10% S.
What is the difference between Vlsfo and MGO? ›
LSMGO has a 0.1pc maximum sulphur content and a viscosity of 2-6 centistoke (cst) compared with VLSFO that has a maximum sulphur content of 0.5pc and a viscosity of up to 380cst.
Why is sulfur so expensive? ›
The sulfur market is largely driven by the demand for phosphorus fertilizers. Sulfur (or more specifically, sulfuric acid) is used to process rock phosphate into a soluble form required by plants. So, the demand for phosphate fertilizer will increase the demand – and market price – for sulfur.
How much does 1 ton of ship fuel cost? ›
Ship & Bunker put the average price for HSFO at the top 20 hubs at $476 per ton on Thursday, down 38% from the May 2022 post-invasion high and back to September 2021 levels. In the container shipping sector, the trend translates into lower quarterly bunker adjustment factors (BAFs) charged to contract customers.
Is bunker fuel the same as diesel? ›
Essential Difference Between Diesel Fuel, Fuel Oil, and Bunker Fuel. With respect to chemical makeup, the difference between diesel, fuel oil, and bunker fuel is hydrocarbon size. Of the three, diesel contains the smallest, shortest hydrocarbon chains. Bunker fuel has the longest, largest hydrocarbon molecule chains.
What is the most common bunker fuel? ›
In practice only two of these are commonly used, namely, marine diesel oil (MDO) and marine gas oil (MGO). MDO is a blend of gas oil and residual oil and MGO is a high quality distillate diesel fuel that contains no residual oil blending components.
What is the most expensive fuel price in the world? ›
Using data from globalpetrolprices.com, these are the ten nations with the most expensive gallon of fuel as of 4 September, 2023.
- Hong Kong, $11.605.
- Iceland, $8.843.
- Monaco, $8.547.
- Netherlands, $8.474.
- Liechtenstein, $8.410.
- Norway, $8.346.
- Denmark, $8.203.
- Switzerland, $8.191.
