The price of marine gasoil (MGO) at Cape Town, South Africa, more than doubled today, with an acute lack of availability caused by disruption since last week to marine fuels shipments from the Mideast Gulf.
The delivered on board (dob) price of 0.5pc sulphur marine gasoil surged to $3,200/t dob today, 10 March, from $1,453.50/t the prior day.
Today's price is by far the highest on Argus' records that date back to December 2012, beating the previous record, set in the early days of the Russia-Ukraine conflict, of $1,565/t on 14 June 2022.
Prices in Europe and Asia corrected heavily downwards today after big gains on Monday, chasing a sharp drop in crude and cargo prices. Front-month Ice Brent fell to $88.89/bl at 16:30 GMT from $100.10/bl yesterday, when levels reached the highest since July 2022, while front-month Ice gasoil price dropped to $1,042.50/t from $1,166/t.
The slump in crude values followed US president Donald Trump's statement that the war with Iran was "practically over" and he floated the possibility the US may ease sanctions on Russia and provide naval escorts through the strait of Hormuz if required.
The G7 also reiterated readiness to support supply "if needed" but ruled out immediate emergency stock releases.
Prices for very-low-sulphur fuel oil (VLSFO) in the key port of Singapore fell by $142/t to $1,049.14/t dob, and prices for high-sulphur fuel oil (HSFO) posted a steeper fall of $242.60/t to $830/t dob.
In Europe, prices in the Amsterdam-Rotterdam-Antwerp (ARA) and Gibraltar-Algeciras-Ceuta hubs fell today. But trading volumes have slowed significantly since the outbreak of the US-Iran war as buyers held back purchasing when they could or booked further ahead for late-March and early April-deliveries.
Prices in Cape Town reflect the lack of flexibility some buyers have in waiting out the price volatility. And with doubts still about the viability of shipments through Hormuz, prices elsewhere in South Africa and premiums in the Middle East, where the effects of shipment disruptions are more immediately felt, continued to climb today.
The VLSFO price in Cape Town was indicated as high as $1,550/t today, nearly $400/t above Monday's assessment, and in Durban VLSFO was offered at $1,400-1,500/t, said traders.
In the Middle East, marine fuel premiums rose to record highs. The VLSFO price against the Singapore 0.5pc sulphur marine fuel value, used as a price basis by Fujairah traders, rose to a $161/t premium, from $56.50/t.
