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Integr8 Fuels: Cheaper bunkers ahead? Supply surge signals more downside

Research Contributor Steve Christy analyses dynamics in international relations and focuses on the main drivers within the oil market to gauge where bunker prices are going.

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Integr8 Fuels: Cheaper bunkers ahead? Supply surge signals more downside

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

Falling prices in August

Singapore VLSFO prices have continued to track Brent crude, and the good news for bunker buyers is that Brent prices have fallen. VLSFO prices in the main bunker centres are now at their lowest levels for around three months.

Aug 2025 graph1 1024x674

The challenge is always to gauge where prices are going from here. Of course, politics, war and sentiment are going to have a huge bearing, and who knows where the ongoing discussions between President Trump and President Putin will take us. Stating the obvious, an end to the war in Ukraine (and the removal of sanctions on Russia) would see oil prices fall; an escalation in the war, or heightened tensions, or further direct and indirect sanctions on Russian oil exports could see prices rise. But even political experts will struggle to tell us which way it is going to go!

All we can do here is to take onboard the dynamics in international relations, and then separate and focus on the main drivers within the oil market.

OPEC+ unwinding production cuts is pushing prices lower

On the supply side, in April, OPEC+ members started to unwind the 2.2 million b/d of voluntary production cutbacks (these cutbacks were agreed in November 2023 and started in the first quarter of 2024). At the same time as the OPEC+ increase, UAE’s production quota is being raised by 0.3 million b/d.

The increase in OPEC+ production since April has not been linear. There are also other complications, in that some countries are unlikely to be able to raise production back to their quota levels. However, in early August, OPEC+ agreed to increase September production by 0.55 million b/d, which will fully unwind the cuts. This means Saudi Arabian output is likely to be close to 10 million b/d (versus 9 million b/d earlier in the year) and UAE production is forecast to rise as its agreed higher quota is introduced. As a result, by September/October, OPEC+ output is likely to be around 2 million b/d higher than it was in March.

On top of this, non-OPEC+ production is forecast to rise by around 1 million b/d over the same period. Hence supply is forecast to rise very steeply this year, with the graph below illustrating the hike from 104 million b/d in Q1 to 107 million b/d in Q4.

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However, the same cannot be said for oil demand. Relatively weak underlying economies, huge economic uncertainty surrounding proposed hikes in US tariffs and the continual shift towards more electric vehicles (EVs) has undermined growth in global oil demand. There have been continual downwards revisions to forecast demand for this year and next, with the IEA currently indicating growth of 0.7 million b/d for 2025 and another 0.7 million b/d in 2026 (equivalent to 0.7%).

Global oil stocks set to rise sharply?

With OPEC+ restricting output in 2024, oil supply and demand were more-or-less in balance. But this balance is literally unwinding as OPEC+ remove their voluntary production cutbacks over the second and third quarters of this year.

We have already seen slight global stock-builds so far this year. Now we are expecting OPEC+ production to ramp up at the same time as world oil demand goes into a seasonal decline from the third to the fourth quarter. Nowadays peak oil demand is in the northern hemisphere summer months, with a seasonal fall of around 1.5 million b/d from Q3 to Q1 the next year.

The pointers are very clear on this basis; we are looking at potentially very big oil stock-builds over the remainder of this year and going into next year. This bearish view is compounded when looking at the demand fundamentals for next year. Even if OPEC+ keep to their plans and maintain their other 3.65 million b/d of cuts in place through 2026, there is still too much oil in the market!

In the case outlined here, stock builds would start to balloon to around 3 million b/d in the fourth quarter this year and then continue at 3-4 million b/d through the first half of next year.

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The issue for OPEC+ is these bearish fundamentals don’t go away, with potential stock-builds going through the second half of next year as well.

War and politics will cloud the outlook and drive oil prices at certain key periods. But we can’t get away from the fact that OPEC+ unwinding their voluntary production cutbacks at this time has placed a massive bearish fundamental position on the oil market. War, Trump, Putin, and sanctions aside, it would look like bunker prices should go much lower over the rest of this year and into 2026.

Given this, what can change?

Any escalation in wars, or the threat of wider involvement will push oil prices high. As will any tightening of sanctions on Russia (or Iran). These developments would ‘cover’ the increases in OPEC+ output and likely support oil prices at higher levels.

Alternatively, any end to the war in Ukraine and ‘reinstatement’ of Russia back into the international arena will only add to the bearish fundamentals outlined here, and push prices even lower. This second option looks good for ‘world order’ and for bunker buyers!

If prices go ‘too low’ then expect an OPEC+ response

However, if prices fall to very low levels because of very weak fundamentals, or a solution to the Russia/Ukraine war, or a combination of both, then OPEC+ is likely to respond. The big players in these OPEC+ decisions are still hugely reliant on oil incomes for their economies and development programs. They are also very good, and ultimately successful, at responding to extreme price falls, with production cuts to re-balance the market. A 10% cut in oil production by these players would result in a much bigger than 10% rise in oil prices, i.e. a cut would raise their revenues.

So, perhaps we want lower prices, but not too low to provoke an OPEC+ response!

 

Photo credit: Integr8 Fuels
Published: 21 August, 2025

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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