Bunker prices are spiking again – but the forward curve says don’t panic

Alt. headline: The fuel bill jumps – and the market is quietly betting it fades

Alt. headline: Read the bunker curve, not the bunker price

Singapore VLSFO leapt to $770 a tonne as Hormuz flared again. The spot number grabs the eye – but the shape of the forward curve, and a widening scrubber spread, tell you far more than the headline does.

The bunker bill is climbing again. On 14 July, delivered VLSFO in Singapore jumped to $770 per tonne and high-sulphur fuel to $523, both up sharply in a matter of days as renewed conflict around the Strait of Hormuz pushed crude higher. It is the second fuel shock of 2026, and for anyone running ships it lands straight on the cost line. But the spot price is the least interesting number on the screen.

Figure 1 – Two shocks in eighteen months: the March 2026 Iran-war spike to $913 faded by June, and July’s Hormuz flare-up has prices climbing again.

The curve is the message

Look at the forward prices, not the spot. Delivered VLSFO sits at $770 today but $612 six months out; VLSFO on a FOB basis is $706 spot against $628 two months forward; even high-sulphur fuel prices lower ahead. That downward slope – backwardation, and a steep one – is the market telling you something specific: it is pricing acute near-term supply stress that it expects to ease. This is the signature of a spike, not a new regime. We have just seen the rehearsal: March’s $913 peak melted back to the $680s by June once the first Iran shock passed.

Figure 2 – Steep backwardation: at $770 spot against $612 six months out, the curve is pricing a shock it expects to fade, not a permanent step up.

Read the bunker curve, not the bunker price.

A spike that is not neutral across the fleet

Here is what the average bunker headline misses: a fuel shock does not hit every ship the same way. The premium of clean VLSFO over high-sulphur HSFO – the number that drives scrubber economics – has widened to about $183 a tonne, up from roughly $78 late last year. When that spread blows out, scrubber-fitted vessels burning cheap HSFO gain a bigger per-tonne fuel advantage, and the payback maths on scrubbers improves with it. The same $770 print that punishes a VLSFO-burning operator quietly rewards the one who invested in exhaust cleaning.

Figure 3 – The scrubber premium (VLSFO minus HSFO) has widened to $183 a tonne, improving the fuel-cost edge for high-sulphur burners.

The same $770 print that punishes a VLSFO burner quietly rewards the scrubber owner.

The strongest case against me

Backwardation is a forecast, and forecasts are wrong when the world changes. If Hormuz stays shut rather than reopening, today’s near-term stress becomes structural, the curve re-prices upward, and the “it fades” read ages badly – exactly the tail risk a steep curve tends to under-weight. I take that seriously. But a base case built on the strait staying at least partially open still points the same way the curve does: a sharp, painful, and temporary spike rather than a permanent reset of the fuel floor.

What I would watch

Three gauges. The spot-to-six-month spread on VLSFO – the depth of backwardation is your near-term stress meter, and a flattening curve would be the first sign the market no longer expects relief. The VLSFO–HSFO spread, which sets scrubber economics and tells you which half of the fleet the shock is really taxing. And whether the July jump survives the next Hormuz headline, or melts like March’s did once the immediate fear passed.