Burgeoning Bunkers

The growing industry awareness of air quality and emissions in the world’s ports could be a catalyst for major change in the bunker market. In the next few weeks the International Maritime Organization (IMO) is expected to meet and try to reach some agreement on both the specification of marine fuels and standards to be imposed. This issue has been hotly contested among shipowners and refiners as these parties can expect to bear the brunt of any increased costs that may result from higher spec fuels. With bunker prices already substantially higher than where they were even a year ago, shipowners seem justified in being jittery about a further price increases. The chart below shows the average price of bunker fuels, Intermediate Fuel Oil 380 (CST) and Marine Diesel Oil (MDO). MDO prices in some markets topped $1,000 per metric ton this week, perhaps a sign of shrinking availability of supplies.