$377k extra: How Iran war sent shipping fuel bills soaring 74%
VLSFO in Singapore hits $886 per tonne—up 74% since February 28—adding over $1.1m to a 3,000-tonne stem.
The cost of marine fuel has surged by up to 77% since the US-Iran conflict began in late February, pushing operational expenses for shipowners to unprecedented levels. In Singapore, the global hub for bunkering, prices for very low-sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO) have climbed sharply, reflecting the war’s impact on critical shipping routes.
On February 27, the day before hostilities erupted, VLSFO was priced at $509 per tonne in Singapore, while HSFO traded at $432 per tonne. By this week, those figures had jumped to $886 per tonne for VLSFO—a 74% increase—and $764 per tonne for HSFO, marking a 77% rise. For a vessel loading 3,000 tonnes of VLSFO, the additional cost now exceeds $1.1 million compared to pre-war levels. Even a smaller fuel purchase of 1,000 tonnes adds nearly $377,000 to the bill.
The Strait of Hormuz: A chokepoint under pressure: bunker prices
The conflict’s epicenter lies near the Strait of Hormuz, a narrow waterway between Iran and Oman that handles roughly 20% of global oil supplies. Disruptions here have sent shockwaves through the shipping industry, as the strait’s strategic importance makes it a focal point of the war. Initial price spikes followed US and Israeli strikes on Iran in late February, with Singapore’s VLSFO peaking at $1,120.50 per tonne by mid-March.
Marine Gasoil
While prices later retreated amid hopes for diplomatic progress, they have never returned to pre-war levels. Supply constraints have compounded the problem, with lead times for VLSFO in Singapore stretching into double digits. In Fujairah, another key bunkering port, VLSFO stocks have at times dwindled to multi-year lows, leaving only a few suppliers able to meet immediate demand. The shortages have spread beyond Asia, affecting Japan, northern Europe, and the Middle East, where shipowners now face longer notice periods or must divert to alternative ports.
Scrubbers gain ground as fuel economics shift
The war has also altered the financial calculus for scrubber-fitted vessels. These systems allow ships to burn cheaper HSFO while complying with emissions regulations. Before the conflict, the price gap between HSFO and VLSFO in Singapore stood at $77 per tonne. Today, that discount has widened to $122 per tonne, making scrubbers a more cost-effective option for owners seeking to offset rising fuel expenses.
More than seven months into the conflict, the shipping industry continues to grapple with the fallout. While freight rates and bunker prices have stabilized somewhat, the initial shock has given way to a new reality: the cost of disruption is now embedded in global shipping. With no immediate resolution in sight, shipowners are adjusting strategies—rerouting vessels, increasing fuel reserves, or accelerating scrubber installations—to navigate the ongoing crisis.
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