Soaring prices following Russia’s invasion of the Ukraine saw LNG as fuel cost nearly five times as much as VLSFO – on 30 August last year the VLFSO price in Rotterdam stood at $745 per tonne while LNG 380e (IFO380 equivalent) stood at a staggering $3,666 per tonne, according to Ship & Bunker. As a result owners of almost all LNG dual fuel vessels chose to run the ships on fuel oil and had done so until recent months.
The picture today is very different – the price for VLFSO in Rotterdam on 20 July was $549.90 per tonne while LNG 380e stood at $465 per tonne.
“With the Russian invasion of Ukraine, LNG prices spiked to extreme levels. Now, LNG prices are getting to a point, where it is cheaper than VLSFO,” commented Sea Intelligence, CEO Alan Murphy in its weekly newsletter. The analyst noted we were now at point “usage of LNG is financially advantageous compared to VLSFO fuel”.
The switch back LNG is evident in the monthly bunkering statistics issued by the Maritime & Port Authority of Singapore (MPA), which regulates the world’s largest bunkering hub. The MPA reported sales of 17,900 tonnes of LNG bunkers in June 2023, higher than 16,300 tonnes sold in the whole of 2022. In May 2023 the volume of LNG bunkers sold in the port of Singapore was 7,300 tonnes as prices had started to ease.
According to DNV’s Alternative Fuel Insights there were 411 vessels capable of being LNG-fuelled in operation in June this year.