Bunkering at $1,000/MT: What I’m Telling Clients Right Now
I spend a lot of time inside clients’ IMOS environments — implementations, optimizations, training sessions. In the past three weeks, almost every conversation has started the same way: what do we do about bunkers?
It is not a surprising question. Singapore VLSFO surged from 574.5 USD/MT on the 2nd March to 1119.5 USD/MT on the 16th March, a near doubling of price in just two weeks — rendering a significant portion of open voyage P&L assumptions functionally obsolete overnight. Figure 1 highlights this spike is particularly strong in the context of the fuel’s historic stability, prior to the Strait of Hormuz closure, Singapore VLSFO had traded within a relatively narrow 500-600 USD/MT range for the better part of two years, highlighting the impact of disruption the global crisis has had on energy markets.
The Singapore-Rotterdam spread widened sharply, and key alternative hubs like Houston also saw increased volatility as demand shifted. Clients who had stemmed fuel before the spike looked smart. Those who had not were staring at P&L positions that bore no resemblance to what they had modelled at fixture.
The Hormuz closure made a difficult situation structurally harder. With the strait effectively closed to commercial traffic, the normal logic of bunkering — where you stem, how much, against what price expectation — broke down entirely. Vessels that would ordinarily bunker in the Gulf cannot get there. Alternative ports are seeing demand they were not built to absorb. And the price signal, when it exists at all, is changing faster than procurement teams can act on it. We’re also seeing that bunker fuel pricing is being influenced by shifts in crude and heating oil, while location, timing, and quality continue to shape the differentials operators are working with.
First: assess your current positions and exposure
The most common mistake I see in a volatile fuel market is delay. Teams want to wait for prices to stabilize. I understand the instinct, but it produces a dangerous gap between what the system says and what is actually happening to your P&L.
The first step is to assess the immediate impact. Which voyages and time charters are already sufficiently bunkered and paid? Which remain exposed to current market pricing? Not every position requires instant repricing, but every position should be evaluated proactively.
In IMOS, bunker prices in Bunker Planning are proposed based on purchase history, but they can — and in this environment, must — be updated manually to reflect current market conditions for any voyages with open exposure. How you reflect that exposure will depend on your internal commercial strategy. What matters is that the assumptions in the system align with how your business is managing fuel cost in reality.
The estimated P&L that comes out of that exercise will likely be uncomfortable. But it will be real, and that is what your head of finance and your CFO need right now.
Second: bring your bunker exposure into the Trading P&L
One of the most underused capabilities I see in client environments is the Bunker Exposure line in the Trading P&L Summary — the unrealized P&L that reflects your open exposure to the bunker market. This exists within IMOS Trading & Risk, an advanced module that many clients add to their system to better manage freight and fuel exposure.
In normal conditions, teams check it periodically. In a market where fuel prices are moving 5–10% in a single session, it needs to be a daily view.
This is not just about bringing exposure into P&L. It is about understanding the impact of the market move, determining where your risk sits, and deciding how you want to adjust your forward strategy and market commitments. If your organization uses bunker swaps to hedge fuel cost, this is also the moment to verify that those instruments are correctly linked to the relevant voyages in IMOS. A hedge that exists in your trading book but is not linked to a voyage does not show up in voyage P&L — and right now, the difference between hedged and unhedged positions is the difference between a manageable quarter and a very difficult conversation with senior leadership.
Third: use historical price data to anchor your next procurement decision
The hardest questions I see clients grappling with is whether to buy fuel today or wait. In many cases — especially when vessels are already at sea — waiting is not an option.
IMOS Bunkering retains a comprehensive history of your organization’s bunker purchases by port, vendor, and fuel type. Reviewing this history provides a baseline for evaluating current quotes and strengthening supplier negotiations.
I recommend running economics based on your view of where the bunker market will go, cross-reference against where vessels will be, and compare it with the voyages and trades likely to be available to execute. At the same time, today’s decisions are not only about price — they are also about regulatory and efficiency considerations. Tools such as FuelEU and EU ETS break-even analysis can help ensure that procurement decisions remain both cost-effective and compliant, even in volatile conditions.
In uncertain markets, better-informed decisions consistently outperform reactive ones.
Bunkers typically represent 40–60% of total voyage operating costs. That figure is not new — it has always been true. What the Hormuz crisis has done is compress the time horizon in which that cost can move, and remove some of the geographic flexibility operators normally rely on to manage it.
Spot and time charter markets have already begun reacting to the disruption, with tanker rates moving sharply in response to changing trade flows and fuel risk. If you would like a deeper market view on this, I recommend subscribing to the Maritime Market Watch from VesselsValue.
IMOS cannot predict where VLSFO goes next. What it can do is make sure that when your bunker desk makes a call, they are making it with accurate voyage P&L context, a clear view of open exposure, and the full weight of your purchase history behind them. That is the difference a well-configured IMOS environment makes in a market like this one.
If your team is struggling with any of the above, whether that is voyage repricing, bunker swap linkage, or getting the Trading P&L view set up correctly, contact us today. We are working with a number of clients on exactly these issues right now.
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