Singapore very low sulphur fuel oil closed above $1,000 a tonne for the first time since March, a level that feeds straight into the bunker surcharges on container invoices1, 7.
Ship & Bunker assessed VLSFO in Singapore at $1,000.50 a tonne on 28 October, up from $990.00 a day earlier1. The price rose to $1,019.50 on 30 October before easing to $1,003.50 on 2 November1, 4. Splash247 reported the milestone on 3 November and tied it to the prolonged Iran conflict7.
The trigger was not crude. Brent fell 5.9% to $106.65 a barrel on 2 November after Iran set out a two-day plan to reopen the Strait of Hormuz3. Marine fuel is a refined product with its own supply chain, and that chain is still tight.
Crude down, fuel oil up
Singapore's residual fuel oil stocks averaged 6% lower in October than in September, at 18.56 million barrels, Enterprise Singapore data show5. VLSFO lead times in the port start at about 13 days, and some suppliers ask for more than three weeks8.
The arbitrage that normally moves low sulphur fuel oil from Europe to Asia is shut. The East-West spread reached $192 a tonne on 28 October, the widest since Platts began tracking the series in April 2022, but high tanker freight makes the voyage uneconomic6. November LSFO arrivals are expected at 1.3 million to 1.5 million tonnes, down from about 1.6 million to 1.7 million tonnes in October6.
Product supply is also exposed. Houthi forces said they struck Saudi Arabia's Ras Tanura refinery, which has capacity of 550,000 barrels a day, on 27 October, and Saudi authorities did not immediately confirm the claim9. Ukraine resumed attacks on Russian refineries at the end of last week, ING said, adding that further strikes would cast doubt on how much diesel Russia exports10.
MABUX, which publishes bunker price benchmarks, listed the same forces behind October's move: Middle East instability, disrupted product flows, tight regional fuel availability and tanker freight high enough to block arbitrage2. Its global VLSFO index rose $70.81 to $913.07 a tonne over the month, and its 380 HSFO index rose $76.75 to $778.422.
Where the cost lands per container
Bunker adjustment factors are quoted per container, usually per TEU, and exist to pass fuel cost through to the shipper11. Each line sets its own BAF, because European Union rules banned the carrier conferences that once fixed common rates in 200812. The rate typically changes monthly or quarterly11.
That timing matters more than the headline number. A contract on a quarterly BAF review will not fully reflect an October spike until its next reset, while a monthly formula will. Shippers rushed cargo ahead of a 1 July BAF reset this year, which shows how much the reset dates move volume13.
The way to test a BAF is to ask for the formula, not only the number. Check which port assessment the line uses, which period it averages and the fuel consumption it assigns per container, then compare that with published assessments. Ship & Bunker's latest readings put the main hubs here:
| Port and date | VLSFO | HSFO | MGO |
|---|---|---|---|
| Singapore, 30 October | 1,019.50 | 916.00 | 1,278.00 |
| Singapore, 2 November | 1,003.50 | 898.50 | 1,263.00 |
| Rotterdam, 2 November | 763.50 | 688.50 | 1,402.50 |
| Fujairah, 2 November | 991.50 | 752.00 | 1,692.50 |
| Houston, 2 November | 814.00 | 589.00 | 1,373.00 |
Smaller shippers usually receive, or should ask for, an all-inclusive port-to-port rate, Freightos notes11. A buyer on that basis sees the October move as one blended number rather than a separate fuel line, so it is worth asking the line what fuel assumption sits inside the quote.
Scrubbers lose part of their edge
MABUX's global scrubber spread, the gap between 380 HSFO and VLSFO, fell $5.94 in October to $134.65 a tonne2. In Singapore it narrowed $35.00 to $90.00 and briefly touched $20.00, while Rotterdam's widened to $68.002.
A narrower spread cuts the saving a scrubber-fitted ship earns from burning cheaper HSFO. MABUX said conventional VLSFO is becoming a more competitive alternative to the HSFO plus scrubber combination, which may reduce the economic advantage of scrubber-equipped vessels2. For a buyer choosing between services, that weakens the case for paying a premium for scrubber tonnage on a narrow spread.
What would bring surcharges down
MABUX expects the global bunker market to stay firm but highly volatile in November, with geopolitical risk and supply constraints outweighing weaker demand2.
Two developments would change that. The first is product flow: the Europe-Asia arbitrage reopens only if tanker freight falls far enough to make the voyage pay6. The second is Hormuz. Iran's two-day plan to reopen the strait pulled crude lower on 2 November3. ING said more traffic is already moving through the strait even as attacks continue10.