Very-Low Sulphur Fuel Oil (VLSFO) prices have risen to USD 710 per metric tonne in Singapore on 2 January 2020, a price increase of 30%, when compared to 2 December 2019. The newly implemented IMO2020 Sulphur Cap marks a milestone for the industry and is likely to affect profitability for many shipowners and operators.
A new decade has begun, and with the IMO2020 regulation implemented on 1 January 2020, the shipping industry is instantly challenged. In the second half of 2019, the fuel oil price spread between low-sulphur fuel oils, such as Marine Gas Oil Low Sulphur (MGO LS) or VLSFO, and High Sulphur Fuel Oil (HSFO) widened significantly, mostly due to the price volatility of HSFO.\
However, through December low-sulphur fuels started to increase significantly in price. Currently, the VLSFO – HSFO spread in Singapore is at USD 340 per metric tonne, the third highest level since low-sulphur fuel became widely available. Similarly, the MGO LS – HSFO spread is at USD 346 per metric tonne, the highest level since 2014.