The price differential between low sulfur fuel oil (VLSFO) and high sulfur fuel oil (HSFO) continues to climb worldwide.
Consultancy Lorentzen & Stemoco noted in a client update that the differential, often referred to as Hi5, now exceeds $100 per tonne in all major bunkering hubs for the first time since before the coronavirus was labeled a pandemic 11 months ago.
“In Fujairah, where the margin is the highest at $128 per ton, that margin can be converted into savings for a scrubber-equipped VLCC running on HSFO, so that about $7,500 per day less is spent on bunkers on a loaded voyage, assuming a consumption of 60 tons per day,” the broker observed.
Tanker analysts at Braemar ACM noted in a market update that with the recent rise in fuel prices, price differentials are starting to make green and scrubber vessels look more attractive for long-term business.
Prior to the onset of the global sulfur cap in early 2020, a $150 price gap was considered the absolute outlier in terms of owners getting a quick return on investment for their outlays on scrubbers.