Bunker fuel prices at Singapore have climbed 74% since the US-Iran war erupted on February 28, adding roughly $377,000 to the bill for a 1,000-tonne stem of very low-sulphur fuel oil (VLSFO) compared with the eve of the conflict.

ENGINE assessed Singapore VLSFO at $509 per tonne on February 27, the final trading day before the war started, with high-sulphur fuel oil (HSFO) at $432 per tonne. By Monday this week, VLSFO had reached $886 per tonne and HSFO $764, gains of 74% and 77% respectively. A 3,000-tonne stem now costs more than $1.1 million above pre-war levels.

How sharp was the initial shock?

Prices went vertical after US and Israeli strikes on Iran on February 28 and the disruption that followed around the Strait of Hormuz. Ship & Bunker data shows Singapore VLSFO rising from $521.50 per tonne immediately before the conflict to $1,120.50 by March 13, a near-doubling in roughly two weeks.

The market then pulled back as supply chains adjusted and hopes periodically surfaced of a diplomatic breakthrough. Prices have never returned close to pre-war levels, however, and have been climbing again in recent weeks.

Is the scrubber trade still paying off?

The bunker spike is also reshaping scrubber economics. In Singapore, the absolute discount enjoyed by scrubber-fitted ships burning HSFO has widened from roughly $77 per tonne immediately before the war to about $122 today, even though the headline price of HSFO itself has surged.

For owners who fitted exhaust-gas cleaning systems when fuel prices were lower, that wider spread partially offsets the higher base cost. For owners without scrubbers, the bill has risen in line with the headline move.

Can shipowners even get the fuel?

Price is only part of the problem. Repeated Hormuz disruption has squeezed supply into Asia and the Middle East, forcing vessels to bunker earlier, carry more fuel, or divert to alternative hubs.

Singapore has seen VLSFO lead times stretch into double-digit days. Fujairah, the Middle East's principal bunkering centre, has at times been effectively dry for prompt VLSFO, with stocks falling to multi-year lows and only a handful of suppliers able to offer product. Tight Japanese availability, longer notice periods in northern Europe and constrained Middle Eastern supply have all featured during the conflict, leaving the market exposed to any fresh shock given low inventories.

What does this mean for shippers and carriers?

Bunker is typically the single largest variable cost after crew and port charges, so a sustained three-quarters rise in fuel cost feeds directly into freight rates, bunker adjustment factors and annual contract talks between carriers, forwarders and beneficial cargo owners.

More than seven months into the war, the price curve mirrors that of freight rates: the initial shock has passed, but the cost of disruption remains embedded in shipping. With inventories still lean and Hormuz supply exposed to further escalation, bunker prices look set to stay elevated through the rest of the year.