Oil and Bunker Price Volatility to Continue

As the Middle East conflict continues and as traffic through the Strait of Hormuz remains disrupted, a recent BRS Weekly Tanker Newsletter discussed the potential future evolution of oil and marine fuel prices. This was quoted by Tradewinds: <u>https://www.tradewindsnews.com/tankers/iran-believes-pressure-campaign-will-get-us-to-capitulate-and-could-raise-fuel-prices/2-1-2024572</u> BRS Shipbrokers flagged another place the tactics could have an impact on the bunker market. The broker pointed out that crude oil and marine fuel prices have largely moved in tandem since the US-Iran conflict started at the end of February, making them “harder to predict and more volatile as they shift in tandem with the whim of political leaders, thereby making it harder for shipowners to manage their bunker costs”. It said if middle distillate markets tighten, as they have due to lower Middle East Gulf exports and Russian refinery outages, marine gasoil would rise in price versus very low-sulphur fuel oil and 380 CST. “This could become important considering the expected rerouting of ships on Saudi Arabian voyages away from Bab el-Mandab via Suez [Canal] and through the Mediterranean, which is an [emissions control area] zone and thus ships either have to use scrubbers or burn 0.1% marine gasoil,” BRS said. “Accordingly, if regional demand soars, MGO prices in the Mediterranean and Red Sea could strengthen versus other regions.”

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