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Marine-fuel markets remain heavily distorted by Middle East disruption entering the final quarter of 2026. Singapore VLSFO was assessed around $930/mt at midday October 19, with LSMGO at $1,315/mt and HSFO at $900/mt, while bunker prices globally remain more than 70% above pre-war levels in some comparisons. The strongest physical shortage is developing in HSFO, where disrupted Middle East exports and attacks on Russian refining have removed an estimated 1.8 million tonnes of monthly supply. VLSFO is comparatively better supplied, LNG bunker volumes are expanding, and biofuel demand has weakened sharply in Singapore. The latest EIA baseline points toward lower crude prices during 2027, and current bunker-price models consequently show substantial year-on-year relief, but those forecasts depend heavily on the war, Hormuz logistics and refinery supply normalizing from current conditions.
2026 has become a bunker-supply problem as much as an oil-price problem
War, disrupted refinery output, tanker shortages and longer fuel-supply routes are creating large differences between grades and between ports. A lower crude-price outlook for 2027 could ease the market, but physical bunker availability remains the key wildcard.
Fuel-by-fuel pressure is diverging
The market is no longer behaving as though all petroleum bunkers are interchangeable derivatives of crude. Feedstock location and refinery availability increasingly determine the premium.
Middle East disruptions have removed at least 800,000 tonnes per month, while Russian refinery attacks have removed roughly another 1 million tonnes per month. Spot premiums have approached $50/mt.
Crude and freight costs remain high, but additional low-sulphur output from China and Nigeria's Dangote refinery is limiting the physical shortage seen in HSFO.
Singapore LNG bunker sales grew more than 21% during the first nine months of 2026, while suppliers continue adding licenses, barges and future delivery capacity.
Singapore marine biofuel demand has fallen sharply, while European compliance economics continue to support selected biofuel demand in Rotterdam.
Hormuz and Russian refinery disruptions remove fuel and raise freight.
Ships refuel farther from Fujairah and increasingly use South Asia and Africa.
HSFO scarcity narrows scrubber savings in some hubs.
Lower oil forecasts compete with unresolved physical bunker constraints.
Marine Fuel Outlook by Grade
The principal grades are entering 2027 with different physical supply, regulatory and demand drivers. The direction of Brent alone does not determine which fuel becomes cheaper relative to another.
| Fuel | Current Market | 2027 Price Direction | Physical Supply Driver | Demand Driver | Main Risk to Outlook | ShipUniverse Outlook |
|---|---|---|---|---|---|---|
| HSFO / IFO380 | Historically tight Middle East + Russian refinery losses are constraining availability. | Modelled global average falls from $747/mt in Q4 2026 to $597/mt in 2027. | Lost Middle East barrels, Russian refinery outages and competing refinery demand. | Scrubber-equipped fleet plus some refinery substitution demand. | Continued war could keep HSFO detached from crude-based forecasts. | Tight Through Near Term |
| VLSFO | $900+ Asia Elevated but better supplied than HSFO. | Global model falls from $940/mt Q4 2026 to $752/mt average in 2027. | China and Dangote output provide additional low-sulphur supply. | Remains the principal conventional fuel for non-scrubber ships. | Renewed crude disruption or tight arbitrage flows into Asia. | High, Then Lower |
| MGO / LSMGO | $1,300+ High global distillate values keep marine gasoil expensive. | Modelled global average falls from $1,480/mt Q4 2026 to $1,184 in 2027. | Global diesel and distillate balances remain constrained. | ECA consumption, auxiliary engines and vessels unable to use residual fuels. | Diesel shortages could keep the grade expensive even if crude falls. | Persistent Premium |
| LNG | Bunker volumes are growing despite volatile gas pricing. | No single liquid-fuel-equivalent price forecast should be applied globally. | LNG infrastructure and bunker-vessel capacity continue expanding. | Rising dual-fuel fleet; Singapore Jan-Sept volumes +21%. | Gas price spikes, methane-slip treatment and regulatory uncertainty. | Structural Growth |
| Biofuel Blends | Demand diverges sharply by port and regulatory regime. | Feedstock, certificates and compliance credits matter more than crude alone. | UCOME/POMEME availability and certification are key constraints. | FuelEU, ETS and voluntary emissions targets support selected trades. | Singapore Jan-Sept biofuel sales fell 47% YoY amid regulatory uncertainty. | Regional / Policy Driven |
| Methanol | Infrastructure is growing faster than actual bunker volume in many ports. | Economics depend strongly on grey vs low-carbon methanol production route. | Supply chains and dedicated bunker logistics remain early-stage. | New methanol dual-fuel ships provide future captive demand. | High low-carbon fuel cost and uncertain regulation. | Early Scale-Up |
| Ethanol / Emerging Fuels | Pilot and demonstration stage. | No credible broad marine benchmark yet. | Existing chemical-tanker and terminal systems may provide infrastructure pathways. | Dual-fuel experimentation and decarbonisation demand. | Standards, engine compatibility and sustainable feedstock availability. | Experimental |
September bunker sales totaled 4.73M tonnes. HSFO-type marine fuel volumes increased while low-sulphur fuel oil volumes declined.
Nine-month bunker volumes are down 58% year over year as Hormuz risk transforms one of the world's largest refuelling hubs.
H1 total bunker volume fell roughly 25%, while alternative-fuel sales grew 28%, particularly bio-LNG.
Ship & Bunker full-year 2027 indicative forecast.
Indicative 2027 annual average.
Distillates remain structurally expensive in the model.
EIA latest 2027 annual forecast.
Bunker Market Explorer
Select a fuel and horizon to see the dominant price, availability and regulatory forces shaping its outlook.
VLSFO • Elevated but better supplied
October 19 midday ENGINE assessment.
Additional output from China and Dangote limits the shortage relative to HSFO.
Remains the default residual bunker for ships without scrubbers.
Renewed crude or refinery disruption can rapidly reverse projected price relief.
VLSFO has more physical supply support than HSFO, making it more likely to track a lower Brent environment if Middle East logistics gradually normalize.
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