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Bunker prices set to climb as oil jumps 4% on Israel – Gaza conflict

The outbreak of new Middle East hostilities drew weakening oil prices to an abrupt halt yesterday as both benchmark crude oils – Brent and West Texas Intermediate – leapt by more than 4%.

Paul Bartlett, Correspondent

October 10, 2023

2 Min Read
Vessel bunkering in Singapore port
Photo: Marcus Hand

Analysts warned that if the Israel-Hamas conflict worsens oil price will likely climb further which will also impact bunker costs for shipping.

Bunker prices were up at most major bunkering ports yesterday reversing a recent trend of falling prices according to figures published by Ship & Bunker.

The development follows a week in which oil prices fell sharply due to concern over inflation and weakening demand. It also follows reports that Saudi Arabia, the world’s largest oil producer, could be prepared to raise production by a million barrels a day from the nine million that is being pumped today. The Saudis and Russians have been following a strategy of voluntary cuts likely to extend at least until the end of the year.  

Yesterday’s hike in oil prices coincided with the release by OPEC of its 2023 World Oil Outlook which differs markedly from International Energy Agency (IEA) forecasts. OPEC expects global oil demand to reach 116 million barrels a day by 2045 compared with 99.6 million barrels in 2022. This forecast is about six million barrels a day more than the organisation’s forecast last year and is likely to require $14 trillion of investment, it said, up from $12.1 trillion last time.

In a foreword to the latest report, OPEC Secretary General Haitham Al Ghais who took up the position as head of the cartel in August last year, revealed that “recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions. Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.”

Related:Fujairah on a roll as Russian oil re-routes

In marked contrast, the IEA said recently that the world was now at the “beginning of the end” of the fossil fuel era.

About the Author

Paul Bartlett

Correspondent

UK-based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.

Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.

In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.

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