Marine gasoil 0.1%S (MGO LS) jumped $167.28/MT in September, from $1,349.80/MT at end-August to $1,517.08/MT — the sharpest move across the bunker complex and a direct hit to the fuel bills of tonnage without scrubbers in emission control areas.

MABUX's September review attributes the surge to a new escalation in the US–Iran military conflict, which lifted the geopolitical risk premium embedded in crude and refined product prices and briefly pushed Brent above $110/bbl. At time of writing, bunker indices were trading close to peak levels.

The other grades followed. The 380 HSFO index rose $79.31 to $701.31/MT, while VLSFO climbed $69.36 to $845.00/MT from $775.64/MT.

Why distillates led the rally?

Diesel and gasoil remained the strongest parts of the barrel. Gulf diesel and gasoil exports stayed well below pre-conflict levels, and refinery capacity elsewhere could not compensate. That tightness fed directly into MGO LS prices.

Strong distillate margins also raised competition for low-sulphur blending components, limiting VLSFO availability and supporting VLSFO prices relative to both crude and HSFO. Lower Gulf output and falling global inventories thinned market buffers further.

What is happening to the scrubber economics?

The MABUX Global Scrubber Spread (SS) — the 380 HSFO/VLSFO differential — narrowed by $9.95 in September, from $153.64 to $143.69, although the monthly average rose $3.75.

Port-level moves were sharper:

• Rotterdam: SS spread contracted $55.00, from $120.00 to $65.00, falling below the $100 SS Benchmark; the monthly average fell $24.54.
• Singapore: the spread narrowed $27.00, from $152.00 to $125.00; the monthly average declined $30.84.

MABUX warns that a decline below the psychological $100 threshold would erode the economics of burning 380 HSFO with scrubbers versus conventional VLSFO. The company expects a moderate downward trend in October.

The ECA Spread (ULSFO vs MGO LS) in Istanbul contracted $50.00, from $125.00 to $75.00, also breaking below $100. The monthly average fell $85.17. MABUX expects no substantial changes in October.

Where are ports mispriced?

By September 30, the MABUX Market Differential Index showed all four major hubs — Rotterdam, Singapore, Fujairah and Houston — underpriced in MGO LS. In VLSFO, Singapore returned to the undervalued zone, joining Rotterdam and Houston, with undervaluation widening by 71 points in Singapore and 46 points in Houston. Fujairah stayed the only overvalued VLSFO port, its premium up 13 points.

In 380 HSFO, Fujairah remained the sole overvalued hub, though its premium narrowed 15 points; discounts widened 44 points in Rotterdam, 15 in Singapore and 18 in Houston.

Rotterdam faced a separate headwind: RED III compliance costs weakened its competitiveness against Antwerp and Hamburg, contributing to shifts in bunker demand.

Is LNG losing its edge?

LNG bunker prices in Sines, Portugal rose $123/MT to $1,608/MT, versus MGO LS at $1,580/MT. The gap favouring conventional fuel narrowed to $28, from $80 in August.

European gas storage sat at 71.16% of capacity as of September 28 — among the lowest for this point in the season in two decades — up 6.43 points from August but only 9.70 points above the 61.46% start-of-year level. TTF ended September almost flat at EUR 69.805/MWh but spiked to EUR 82.500/MWh intra-month. MABUX sees LNG prices with roughly one-third upside potential through winter.

Elsewhere, UCL research indicates about 10% of global shipping GHG emissions occur within port areas, and DNV estimates low-emission bunker demand could more than quintuple by 2050 under a global IMO framework, though revisions to the IMO Net-Zero Framework cloud the timeline.

MABUX expects a moderate upward trend in bunker prices in October, with tighter supply supporting MGO LS most, while weaker global oil demand and recovering Gulf flows cap the upside — and any further Middle East escalation remains the key risk.