Global average VLSFO prices have jumped considerably this year. Image Credit: Ship & Bunker
Shipping company Frontline is paying as little as half the global average price for bunker fuel because of a forward price agreement signed last year.
The company has a deal requiring it to buy 5,000 mt/month between October 2020 and December 2021 at $325-365/mt, it said in quarterly results on Monday. That compares with the current global average VLSFO price of $618/mt, according to Ship & Bunker's G20 Index of prices at 20 leading bunkering destinations.
The G20 Index for VLSFO has been above the $325-365/mt range since November 2020 -- for almost all of the timespan of Frontline's agreement.
The company has a further agreement obliging it to buy 5,000 mt/month between January and December 2021 at $232/mt, it said.