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Integr8 Fuels: Singapore VLSFO bunker prices steady while HSFO hits two-year low

Research Contributor Steve Christy analyses why Singapore HSFO prices have fallen so much – the lowest level for more than two years — leading to VLSFO/HSFO differential to much wider levels.

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Integr8 Fuels: Singapore VLSFO bunker prices steady while HSFO hits two-year low

By Steve Christy, Research Contributor, Integr8 Fuels
[email protected]    

30 July 2025

Relative strength in Singapore VLSFO has disappeared

Two months ago, we wrote about how Singapore VLSFO prices had moved to a strong premium versus Brent crude. This took place in late April/early May, as crude prices fell sharply and bunker prices failed to follow. At the time Singapore VLSFO was about $40/mt ‘more expensive’ than if we had continued at a parity with crude.

Around mid-June there was a spike in all prices, in response to US, Israeli and Iranian attacks in the Middle East region. Since then, there has been a significant rebalancing of VLSFO supplies in Asia, with a big leap of supplies and components arriving in the region. Arbitrage volumes coming in so far this month are some 40% higher than in June, and also running well above the average year-to-date figure. The net result is that, after a period of relative strength, the past two weeks have seen Singapore VLSFO come back into line with Brent crude; a similar position to three months ago.

graph 01 July 2025 1 1024x710

Hence, over the past four months we have seen Singapore VLSFO prices move up from around 99% to 105% of Brent crude, and now back down and stabilised at around 100%.

Singapore HSFO also strengthened April/May, but since then it’s been down and down

In April/May, Singapore HSFO prices similarly strengthened relative to Brent crude, up from around 86% to close to 90%. Like VLSFO, there was also a turning point in the Singapore HSFO market in May to June, but since then the Singapore HSFO market has just kept falling relative to Brent crude!

graph 02 03 july 2025 1024x340

These market movements have led Singapore HSFO prices down to around $415/mt, which is the lowest level for more than two years.

The extent of the current weakness is reflected in the fact that Singapore HSFO prices have moved from backwardation into contango. The July/August contango is now at $6/mt, its most extreme for almost five years. This is not something that typically happens at this time of year when demand for HSFO in the Middle East power sector for air conditioning is usually high.

graph 04 july 2025 1024x699

Why have Singapore prompt HSFO prices fallen so much?

In mid-June, the Israel/Iran conflict had raised concerns about natural gas supplies in the region, and this had bolstered HSFO prices as a replacement into power generation. However, the subsequent ceasefire then removed these worries and prices started to fall, and then fall sharply.

This unseasonably sharp drop in HSFO prices came about after stock levels had increased in June and then a significant number of cargoes came onto the market in July. There were several cargoes from at least four refiners in India that were made available, and on top of this volumes from Bahrain and Iraq were also put on the market in July. This is a rare occurrence.

At the same time, Saudi Arabia is on a strategy to burn less fuel oil in its power sector. It looks like Saudi Arabia imported around 70,000 b/d less fuel oil in June 2025 than in June 2024, and exported around 90,000 b/d more than the previous year. This alone is a net swing of 160,000 b/d in ‘available’ volumes in the HSFO market.

To compound these weaker developments, during this period OPEC+ has been unwinding its voluntary crude production cuts. As part of this, Saudi Arabia increased its June production by a massive 700,000 b/d. This is mostly heavier and more sour grades, and so will ultimately have a positive impact on the amount of HSFO coming out of the refining system.

Lower demand, higher availabilities, and more trading; a recipe for lower prices

All these developments have led to a big increase in HSFO volumes in the market and a big increase in the amount of trading taking place. Given this, it clearly explains the current weakness in Singapore and Fujairah HSFO bunker prices. As this Saudi strategy to burn less fuel oil continues, and Saudi Arabia continues to increase (heavier and more sour) crude production as the OPEC+ cuts are unwound, then we are likely to see more HSFO cargoes in the market.

Slightly lower VLSFO prices & much lower HSFO prices

So, although Singapore VLSFO prices have moved down and back into line with Brent crude, the even bigger drop in HSFO bunker prices has led the VLSFO/HSFO differential to much wider levels. So far in July this spread has averaged more than $100/mt, it’s biggest for 8 months.

graph 05 july 2025 1024x717

Now to look at the future!

Looking ahead in the short to medium term, the oil supply/demand balance does look bearish, with increasing OPEC+ and non-OPEC+ production, against a backdrop of more limited increase in global oil demand. However, global conflicts and a more unpredictable political scene make this a far from a ‘done deal’ towards lower bunker prices. One subject now on everyone’s lips is Russia. The planned EU sanctions on banning imports of oil products derived from Russian crude starting in 2026 is one issue. But possible US sanctions against Russia in light of the President Trump/President Putin ‘relationship’ could be a far bigger deal.

Summing up what we all know, but what we can’t predict is: the fundamentals look bearish, the political risks look bullish and any solutions to the wars in Ukraine and Gaza could bring prices down. Not very helpful, but at least we know what we are looking at!

 

Photo credit: Integr8 Fuels
Published: 31 July, 2025

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Fuel Testing

VPS strengthens China presence with new Shanghai marine fuel testing facility

Investment in the new testing laboratory comes as marine fuel volumes in Chinese ports continue to grow and customers increasingly demand faster testing and advisory services.

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VPS strengthens China presence with new Shanghai marine fuel testing facility

Marine fuels testing company VPS on Tuesday (1 July) announced the opening of its brand new testing laboratory in Shanghai, China.

The company said this strategic investment strengthens VPS’ global laboratory network and reinforces the company’s commitment to delivering faster, locally-based testing services to customers operating in one of the world’s most important maritime markets. 

“Shanghai has emerged as one of the fastest growing marine bunkering hubs and is expected to play a major role in the future supply of both traditional fossil fuels and emerging low-to-zero carbon fuels,” it said in a statement. 

“The new Shanghai laboratory will provide comprehensive marine fuel testing services, enabling customers to benefit from further improved turnaround times and enhanced operational decision making.”

The facility will support vessel owners, operators, charterers and fuel suppliers, with rapid, independent analysis and technical expertise, helping stakeholders to manage fuel quality risks, protect assets and maintain regulatory compliance.

Dr. Malcolm Cooper, CEO at VPS, said: “VPS is pleased to announce the opening of our new Shanghai Laboratory, which will provide fuel quality testing for bunker fuels including methanol. China is central to the global shipping industry being the world’s largest shipbuilder, producer of shipping containers and operator of the biggest commercial fleet. Shanghai is therefore the perfect home for our latest laboratory, as VPS is the world’s leading fuel testing company”.

The investment comes as marine fuel volumes in Chinese ports continue to grow and customers increasingly demand faster testing and advisory services. The new facility further enhances the VPS global footprint, which already includes laboratories in Rotterdam, Singapore, Fujairah, Houston and Manchester, supported by an international team of technical experts, sales professionals and customer service specialists.

In addition to supporting conventional marine fuels, the Shanghai laboratory will provide testing and advisory services relevant to the industry’s growing adoption of low-to-zero carbon fuels, assisting customers to navigate emerging fuel quality performance and compliance challenges.

Andrew Morton, VPS MD-AMEA, stated: “The opening of our new laboratory in Shanghai’s Lingang New Area, positions VPS at the heart of one of China’s most important maritime and industrial growth hubs. This investment reflects our confidence in the Chinese maritime market, our commitment to supporting customers closer to where they operate and our belief that Asia will remain at the forefront of shipping’s energy transition.”

The Shanghai laboratory will serve both domestic and international customers operating throughout China and across the wider Asia-Pacific region, supporting ongoing growth in marine fuel testing demand and providing a platform for future expansion of VPS services within the Chinese maritime sector.

 

Photo credit: VPS
Published: 1 July, 2026

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Bunker Fuel

AD Ports Group and IRH Global Trading to advance bunkering at Khalifa Port

Both signed a MoU, outlining potential collaboration in bunkering services to vessels calling at Khalifa Port and the development of alternative bunker fuels such as LNG, biofuels, and methanol.

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AD Ports Group and IRH Global Trading to advance bunkering at Khalifa Port

AD Ports Group on Tuesday (30 June) said it has signed a Memorandum of Understanding (MoU) with IRH Global Trading Ltd. to explore strategic cooperation in bunkering services and alternative marine fuels at Khalifa Port.

The MoU outlines potential collaboration across a range of areas, including the provision of bunkering services to vessels calling at Khalifa Port, the development of alternative fuel solutions such as Liquefied Natural Gas (LNG), biofuels, and methanol, and the exploration of opportunities related to fuel storage infrastructure, terminal facilities, and fuel sampling and testing capabilities.

Saif Al Mazrouei, CEO, Ports Cluster – AD Ports Group, said: “This collaboration reflects our commitment to forging strategic alliances that create long-term, sustainable value. 

“By working alongside trusted partners such as IRH, we are enhancing our capabilities and supporting the development of future-ready infrastructure and services that reinforce the UAE’s position as a leading global trade and logistics hub, in line with the vision of our wise leadership.”

Ali Rashed Alrashdi, Group CEO – International Resources Holding, said: “This collaboration with AD Ports Group reflects IRH’s commitment to build strategic partnerships that drive real economic impact. 

“As we continue to develop our global energy trading platform, bunkering and alternative marine fuels represent a high-potential area of growth. We see Khalifa Port as an ideal base from which to explore these opportunities, and we look forward to working closely with AD Ports Group to bring them to life.”

Through this collaboration, AD Ports Group and IRH Global Trading aim to further enhance Khalifa Port’s value proposition as a multi-purpose, deep-water port that supports efficient, sustainable, and future-oriented maritime operations.

IRH Global Trading is a global commodities trading firm with interests across the mining and energy value chain and plans to build a diversified global minerals and energy trading platform, including LNG, Liquefied Petroleum Gas (LPG), crude oil, and petroleum products. 

 

Photo credit: AD Ports Group
Published: 1 July, 2026

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Biofuel

Arkas Bunker delivers 15,000 mt of biofuel in Turkey over two years

Seçkin Gül, General Manager of Arkas Bunker said during that period, the company supplied more than 15,000 mt of biofuel and achieved an emissions reduction of 14,500 mt.

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Arkas Bunker delivers 15,000 mt of biofuel in Turkey over two years

Turkey-based marine fuel supplier Arkas Bunker on Tuesday (30 June) said it has completed 60 biofuel bunkering operations across 32 different vessel types over the past two years in the country. 

Seçkin Gül, General Manager of Arkas Bunker said during that period, the company supplied more than 15,000 metric tonnes (mt) of biofuel and achieved an emissions reduction of 14,500 mt.

He said this during the Biofuels in Shipping seminar held in Istanbul, where the company and DB Tarımsal Enerji addressed the use of biofuels in shipping through the lenses of sustainability, technical compatibility, regulations, and field experience.

“The transition to low-carbon fuels in shipping is no longer a long-term goal—it is today’s priority. At Arkas Bunker, we view biofuel not merely as an environmental alternative, but as a solution that is compatible with existing vessel infrastructure, proven in real-world operations, and supportive of the sector’s compliance with regulations, Gül said. 

Drawing attention to the growing role of carbon intensity in vessel operations, Gül stated: “Carbon cost will increasingly influence a wide range of areas—from fuel selection to route planning, and from customer preferences to financing conditions. 

“For this reason, access to low-carbon fuels will not only be an environmental responsibility for the maritime sector, but also a key component of commercial competitiveness. Strengthening Türkiye’s capabilities in production, supply, and bunkering, as well as strengthening collaboration among producers, suppliers, and end-users, is of great importance for regional competitiveness.”

The seminar also highlighted Turkey’s potential to become a regional supply hub for low-carbon marine fuels.

“With its strategic geographic location, strong port infrastructure, advanced logistics network, maritime expertise, and domestic biofuel production capacity, Türkiye is well positioned to play a significant role across Mediterranean, Black Sea, and European trade routes,” the companies said. 

 

Photo credit: Arkas Bunker
Published: 1 July, 2026

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