Spot prices for very low sulphur fuel oil (VLSFO) in Istanbul have held steady this month, despite a sharp drop in demand after the Mediterranean emission control area (ECA) came into force.
The new regulation, which limits sulphur content in marine fuels to 0.1pc, has prompted suppliers in Istanbul to scale back 0.5pc VLSFO volumes. Many have shifted focus to marine gasoil (MGO) and ultra-low sulphur fuel oil (ULSFO), helping to support VLSFO prices.
One supplier at the port said demand for VLSFO in May was 12 times lower than in April, while spot demand for MGO doubled. The drop in VLSFO demand has coincided with a sharp rise in ULSFO availability, after two domestic suppliers began offering it in April ahead of the ECA.
Only vessels heading to regions with looser rules on sulphur emissions — such as the Black Sea — are still taking on VLSFO in Istanbul.
Although VLSFO demand is thin, traders said it may still be enough to support current price levels. VLSFO supply may remain tight in the short term as local refiners prioritise MGO and ULSFO production to cater for the shift in demand.
Argus assessed delivered VLSFO in Istanbul at $617.50/t on 23 May, up from $600.50/t on 30 April.
