A dramatic slowing of the global economy this year as a result of the coronavirus pandemic has ensured the previously predicted 20% to 40% increase in bunker costs due to IMO 2020 has failed to materialize.
Instead, while the global bunker market in 2020 saw a considerably wider spread of prices than in 2019, overall prices during the last year were 7% lower than the preceding year, according to data from Ship & Bunker.
The analysis takes into account that prior to the January 1, 2020 introduction of the IMO 2020 rule the majority of vessels were lifting HSFO, at which point they switched to burning VLSFO for 2020 and beyond.
Data tracking the average bunker prices at major ports - Ship & Bunker's Global 20 Ports Average (G20) - shows that the average price for HSFO in 2019 was $405/mt compared to $376/mt for VLSFO in 2020 - an decrease of 7%.
But the squeeze on both logistics and demand caused by IMO 2020 prompted VLSFO prices at the start of the year to be much higher, with the index hitting a high of $694/mt on January 6.
As COVID measures then took their toll, prices sunk to a low for the year of $210/mt on April 10, giving a price spread of $484 over the course of 2020.
In 2019, HSFO prices peaked on September 18 at $502/mt, sinking to a low of $324/mt on December 3, giving a spread of $178.
With the latest analysis suggesting oil will continue to head higher next year, a repeat of lower prices seems unlikely for 2021.
With Goldman now indicating Brent will average $65/bbl for 2021, it suggests we could well see the return of $600/mt+ bunkers next year.