• Ship & Bunker raises G20-VLSFO Q4 forecast to $758/mt, from $646/mt in last month's outlook; Q3 up $40/mt to $745/mt
• EIA lifts Q4 2026 Brent forecast to $90.66/bbl, up $12.66/bbl from August; Q3 up $3.90/bbl to $89.11/bbl
• Full-year 2026 Brent forecast climbs to $91.01/bbl from $86.81/bbl; 2027 to $73.74/bbl from $69.39/bbl
• Shut-ins averaged 6.7 million b/d in August, up from 5.0 million b/d in July, with Red Sea attacks halving Yanbu exports
• Current G20-VLSFO price stands at $842.50/mt; Singapore $856/mt, Rotterdam $701/mt

Ship & Bunker has raised its bunker price outlook for the second month running after the US Energy Information Administration (EIA) lifted its Brent crude forecast again in the September Short-Term Energy Outlook (STEO), with the agency now expecting prices to hold near $90/bbl through the end of the year rather than easing in the fourth quarter.

In last month's outlook EIA had assumed severe constraints on Strait of Hormuz transits would persist through August and then ease; instead, shut-ins rose over the month and the agency has pushed its recovery timeline out again.

EIA now forecasts Brent to average $89.11/bbl in Q3 2026 and $90.66/bbl in Q4, up from $85.21/bbl and $78.00/bbl respectively in last month's outlook, with the Q4 revision of $12.66/bbl the largest in the report.

For the full year, EIA sees Brent averaging $91.01/bbl in 2026, up $4.20/bbl from the August STEO forecast of $86.81/bbl.

The 2027 full-year forecast has been lifted from $69.39/bbl to $73.74/bbl, with the increase concentrated in the first half: Q1 2027 rises to $84.90/bbl from $73.95/bbl and Q2 to $77.00/bbl from $71.00/bbl, while the Q4 2027 forecast is slightly lower at $63.94/bbl.

Brent averaged $91/bbl in August, $7/bbl higher than in July, as exports out of the Middle East remained constrained and more production was shut in, EIA said.

The agency estimates closure-related shut-ins averaged 6.7 million b/d in August, up from 5.0 million b/d in July, and now assumes they will average 5.7 million b/d in Q4 before falling to 2.7 million b/d in Q1 2027.

Explaining the higher shut-in figure, EIA points on the Iranian side to the renewed US blockade on Iran's oil exports following Iran's attacks on tankers in the strait, and to a fresh round of OFAC sanctions on Iranian oil interests, both of which it expects to restrict Iran's exports and cut its production.

Attacks on Saudi exports through the Bab el-Mandeb added to the squeeze, cutting shipments from Yanbu on the Red Sea by about half in August, EIA says, citing Vortexa estimates.

Saudi Arabia has responded by routing more oil through the Suez Canal, a longer and costlier route for Asian customers, and has reportedly begun ship-to-ship transfers outside the Gulf, but EIA expects the constrained Red Sea channel to limit Saudi supply until shipping flows adjust.

Global oil inventories have fallen by an estimated 400 million barrels so far this year, and EIA expects draws of 3.0 million b/d in Q3 and 1.7 million b/d in Q4, keeping prices elevated until flows normalise and stocks can be rebuilt.

The agency still expects most production and trade flows to return to pre-conflict averages by Q2 2027, helped by pipeline and overland bypass routes, more ship-to-ship transfers, and new bypass pipeline capacity in the UAE due in mid-2027, with prices falling to around $67/bbl in the second half of next year.

EIA also warned that volatility in flows through Hormuz and the alternative routes is likely to produce more short-term price swings than its forecast shows.

For bunker buyers of distillate, the report is bleaker still: EIA forecasts US distillate inventories will fall below 100 million barrels in September and stay below the five-year low through most of 2027, with US diesel crack spreads above $2/gal from August to November, and it assumes global distillate production will remain below last year's levels in the coming months.

Bunker Price Implications

Based on EIA's updated crude outlook, Ship & Bunker now forecasts VLSFO prices at primary bunkering ports, as tracked by the G20-VLSFO Index, to average $745/mt in Q3 2026 and $758/mt in Q4, up from $705/mt and $646/mt respectively in last month's outlook.

For the full year, the revised EIA forecast implies a G20-VLSFO average of $761/mt in 2026 and $617/mt in 2027, compared with $718/mt and $574/mt in the August outlook.

The G20-HSFO Index is now forecast to average $623/mt in Q3 and $636/mt for full year 2026, up from $593/mt and $605/mt respectively last month, while the G20-MGO Index is forecast at $1,182/mt in Q3 and $1,208/mt for the full year, up from $1,103/mt and $1,124/mt.

Current G20-VLSFO prices stand at $842.50/mt, with VLSFO prices at $856/mt in Singapore and $701/mt in Rotterdam.

In Singapore, the world's largest marine fuel hub by volume, Ship & Bunker forecasts VLSFO to average $708/mt in Q3, $720/mt in Q4, and $723/mt for full year 2026, up from $666/mt, $610/mt, and $678/mt respectively in the August outlook.

At Rotterdam, the key European hub, the Q3 VLSFO forecast is $632/mt, rising to $643/mt in Q4 and $645/mt for the full year, compared with $602/mt, $551/mt, and $613/mt last month.

Ship & Bunker publishes bunker price forecasts for every port and index it covers, based on the Brent forecasts from the monthly EIA STEO.

The forecasts are based on the average price relationship between each fuel and Brent over the previous 12 months.