Singapore's HSFO demand rose on the month and on the year in January, supported by ships installed with scrubbers that still prefer longer voyages around the Cape of Good Hope (COGH).
And the deferment of IMO's carbon pricing and regulatory framework last year has slowed the sector's push for decarbonisation, further supporting demand.
The scrubber spread, the difference between very-low sulphur fuel oil (VLSFO) and HSFO prices, averaged $64.12/t in January — down by 25pc from the same period last year. The Singapore scrubber spread narrowed further to an 11-month low of $26/t on 16 February, when HSFO prices climbed to almost an eight-month high of $441/t delivered on board (dob).
January's HSFO bunker sales hit a record high of 2.16mn t at the key bunker hub of Singapore, because many buyers continued to be attracted by the lower cost, particularly if their vessels are scrubber-fitted for lower emissions. The average HSFO price in January stood at $375.79/t delivered on board (dob), up by 7.7pc on the month on firm buying interest and some expectations of near-term supply risks. Comparatively, VLSFO prices rose by a lesser extent of 3.7pc on the month, because buyers without urgent requirements stayed on the sidelines awaiting a clearer market outlook. Tight supply of finished grade VLSFO supported January's VLSFO prices, with market participants noting limited blend stock from end-January to early February in Singapore.
Some shipowners bunkered VLSFO at Port Klang, Malaysia, in the first week of February, because of tight spot availability in Singapore, said a vessel owner, adding that Port Klang VLSFO prices had surfaced at around a $20/t discount to Singapore levels.
Singapore's demand for conventional bunkers has been "decent" in January, because buyers trade ahead of the lunar new year period, a trader said. Buying interest typically slows from February to March, he added, which could be due to the lunar new year festivities around this time.
Outlook
Many suppliers and traders are focusing on the conventional bunker business this year, because bio-bunker enquiries are scarce and the pick-up in methanol bunkering is slow, a Singapore-based supplier said. The Maritime and Port Authority of Singapore (MPA) issued three methanol bunkering licences in November 2025.
Conventional fuels trading has been robust in Singapore, particularly since buyers had limited incentive to switch to alternative fuels given the delayed adoption of International Maritime Organization's Net Zero Framework (NZF) in October 2025.
Demand for HSFO in Singapore may ease with shorter travel routes if more shipowners return to the Suez Canal. Major shipowners like Maersk and Hapag-Lloyd announced their return to the Red Sea earlier this year.
But consensus among maritime participants is that HSFO demand is unlikely to wane in the foreseeable future. Other shipowners like Hong Kong's Orient Overseas Container Line (OOCL) are steering clear of the Suez Canal because of geopolitical uncertainty and concerns over the safety of the crew.
HSFO is still the preferred bunker fuel for ocean-going vessels with exhaust scrubbers installed, with many container liners locking in term contracts, a tanker owner observed.
Returning to the Red Sea is a "security issue" and most tanker operators would "avoid until it is 100pc safe", a tanker owner said. "As long as the freight market doesn't react, we'll still be fine going around [the Cape of Good Hope]," another shipowner said.
