Marine gasoil with low sulphur content surged $167.28/MT in September, climbing from $1,349.80 at the end of August to $1,517.08/MT, as a fresh escalation in the US–Iran military conflict drove up the geopolitical risk premium embedded in crude and oil products, according to MABUX Director Sergey Ivanov.

The rise in MGO LS outpaced all other bunker grades. The 380 HSFO index gained $79.31, from $622.00 to $701.31/MT, while VLSFO added $69.36 to reach $845.00/MT, up from $775.64/MT at end-August. At the time of writing, bunker indices were trading close to peak levels.

For shipowners and operators, the immediate consequence is a sharp jump in voyage costs, with distillate-burning tonnage hit hardest. Ivanov attributes the distillate strength to Gulf diesel and gasoil exports running substantially below pre-conflict levels, while refinery capacity elsewhere has struggled to compensate. Strong distillate margins have also pulled low-sulphur blending components away from VLSFO production, tightening availability of that grade and supporting its price relative to crude and HSFO.

Scrubber economics under pressure

The MABUX Global Scrubber Spread — the differential between 380 HSFO and VLSFO — narrowed by $9.95 in September, to $143.69. The move has direct commercial implications: if the spread falls below the psychological $100 threshold, scrubber-fitted vessels lose their cost advantage over conventional VLSFO burning.

Rotterdam has already breached that line. The port's scrubber spread contracted by $55.00, from $120.00 to $65.00, well under the $100 benchmark, with the monthly average down $24.54. In Singapore, the differential narrowed by $27.00 to $125.00, and the monthly average fell $30.84. Ivanov expects a moderate downward trend to continue through October.

The ECA Spread in Istanbul — ULSFO versus MGO LS — also contracted, dropping $50.00 to $75.00 and falling below the $100 mark, with the monthly average down $85.17. Ivanov sees no substantial change in this dynamic in October.

Hub imbalances persist

MABUX's Market Differential Index, which compares market bunker prices against its digital benchmark, showed undervaluation dominating across all three fuel segments in the four major hubs: Rotterdam, Singapore, Fujairah and Houston.

Singapore returned to the undervalued zone in VLSFO, with undervaluation widening by 71 points. Rotterdam and Houston deepened by 17 and 46 points respectively, while Fujairah remained the only overvalued port, its premium rising 13 points. In the 380 HSFO segment, Fujairah stayed overvalued despite a 15-point narrowing; discounts widened by 44 points in Rotterdam, 15 in Singapore and 18 in Houston. All four ports were undervalued in MGO LS, with Rotterdam's MDI falling 101 points.

Rotterdam faces a separate headwind. Ivanov notes that RED III compliance costs are eroding the port's competitiveness against Antwerp and Hamburg and shifting bunker demand toward those neighbouring ports.

LNG advantage erodes

LNG bunker prices in Sines, Portugal, rose $123 to $1,608/MT in September, narrowing the gap versus conventional fuel to just $28, compared with $80 in August. MGO LS in Sines was quoted at $1,580/MT.

European gas storage stood at 71.16% of capacity as of September 28, up 6.43 percentage points from August but among the lowest levels of the past two decades heading into winter. Middle East tensions have disrupted Qatari LNG supply, intensifying competition between European and Asian buyers for spot cargoes. The TTF benchmark ended September essentially flat at EUR 69.805/MWh, but swung as high as EUR 82.500/MWh during the month. Ivanov sees LNG prices with roughly one-third upside potential, with upward pressure persisting through winter.

Looking ahead, MABUX expects the bunker market to remain volatile in October, with the Middle East and the Strait of Hormuz as the key drivers, tight crude and distillate supply supporting prices — particularly MGO LS — while weaker global oil demand and a gradual recovery in Gulf flows limit further upside. MABUX's base case is a moderate upward trend, with any geopolitical escalation remaining the principal upside risk.