Average VLSFO price reached $856 per ton, up 68 percent since mid-February; spot freight rates continue to rise; analysts warn of further market shock if the crisis drags on

As reported by CCTV+, citing Lloyd’s List from May 29, bunker fuel prices have surged nearly 70 percent amid the closure of the Strait of Hormuz. Container lines are passing this burden on to shippers, who in turn pass it to end consumers.

Data from global bunkering hubs show that on May 28, the average price of very low sulphur fuel oil stood at $856 per ton. That is 68 percent higher than in mid-February. The price of high sulphur fuel oil rose 66 percent to $736.50 per ton.

The price surge is driven not only by physical fuel shortages due to the blockade but also by panic expectations in the market. Traders are pricing in a months-long closure, creating a speculative bubble. Consulting firm Drewry noted that Middle East tensions are strongly affecting market sentiment. Higher bunker prices and surcharges are putting upward pressure on all trade routes. Spot freight rates continue to rise. Analysts warn that the market shock could intensify if the strait remains blocked for more than three months.

Shippers have already begun renegotiating long-term contracts. Some are trying to switch to rail routes across Eurasia, though their capacity is limited. Others are forced to adopt slow steaming to reduce fuel consumption, leading to delivery delays.

Industry experts estimate that if the blockade lasts through the summer, freight rate increases could reach 150 percent compared to pre-war levels. Routes from Asia to Europe and to the US East Coast will be particularly hard hit.

Note: Bunker fuel is the fuel used to power ship engines. Its sharp rise directly increases the cost of maritime transport, which ultimately affects the prices of almost all goods carried by sea.

The Strait of Hormuz is not just a dot on the map. It is an artery through which energy flows. When it is blocked, not only fuel becomes more expensive.

Everything that ships carry becomes more expensive. And the bill is not paid by captains or oil traders. It is paid by consumers. Container lines pass costs to shippers. Shippers pass them to shops. Shops pass them to buyers. The chain is as clear as glass. The question is not whether prices will rise. They are already rising. The question is how long the world will watch this crisis from the sidelines. And when, at last, it will start looking for alternative routes.

Not only for ships. For its own economy. Because globalisation, built on cheap logistics, has cracked. And the price of that crack is measured in every ton of bunker fuel that has become unaffordable.