With the IMO 2020 regulation restricting bunker fuel to 0.5% sulphur content from 1 January 2020 market observers had been expecting HSFO to become marginalised and potentially difficult to purchase in many ports.
However, scrubbers have proved to be an economical option with owners benefiting from high price spreads between HSFO and very low sulphur fuel oil (VLSFO) and marine gas oil (MGO).
A presentation by Minerva Bunkering CEO, Tyler Baron at the Fujairah Bunkering and Fuel Oil Forum (Fujcon 2023) showed that in 2022 HSFO accounted for 26% of the 230 million metric tonne (mt) global marine fuel market in 2022. The largest share of the market was taken by VLSFO with 62%, while the MGO sales accounted for 11%, and other fuels 1%.
Looking at top bunkering locations, 28% of bunker sales in Singapore were HSFO, some 31% in Amsterdam – Rotterdam – Antwerp (ARA), and 35% in the US Gulf Coast.
Scrubbers allowing the continued use of HSFO have proved popular with owners of larger tonnage according to DNV as of 2023 there are 5,006 vessels fitted with exhaust gas cleaning system, or due to be this year.
Higher oil prices since the Russian invasion of Ukraine have driven price spreads between high and very low sulphur fuel oil giving significant savings to scrubber-fitted vessel burning HFSO. At present the price difference in Singapore is $142 per tonne, VLSFO priced at $558.50 per tonne and IFO380 at $446.50 per tonne, according to Ship & Bunker. In Rotterdam the price spread is $148 per tonne, and Houston there is a $190.50 per tonne difference.
As the first scrubbers designed with carbon capture and storage (CCS) capability starting to be fitted the HFSO could remain in demand for many years to come.