Mediterranean Shipping Co (MSC) has become the first liner major to take action against the extraordinarily volatile fuel bills it is facing, announcing yesterday its fuel surcharges will be reviewed on a fortnightly – not monthly – basis from the middle of next month for all spot and quarterly contracts on Asia trades.
“The current global political situation is creating major, and unpredictable, fluctuations on global fuel prices,” MSC, the world’s largest containerline, stated yesterday. The new fuel surcharge changes will become effective from April 15.
Fuel prices have been rising for many months. Back in the summer of 2008, a couple of months ahead of the collapse of Lehman Brothers and the global financial crisis, the average price for IFO 380 fuel, then the dominant shipping fuel, at the world’s top four bunkering hubs averaged $739.25 per tonne. The day before Russia invaded Ukraine last month low sulphur fuel (VLSFO) prices at the same four ports – as tracked by Ship&Bunker – stood at a new high of $741. They have since leapt dramatically, crossing the the $1,000 per tonne mark for the first time in history at key bunkering hubs eight days ago as commodity prices spiked across the board in the wake of the war with the price of Brent crude topping the $130 per barrel mark earlier this month. High sulphur fuel oil also crossed the $700 mark at the same time.
In recent days, bunker prices have climbed down with the latest Ship&Bunker data for the top four bunkering hubs showing an average price of $922.50.
Oil prices dropped yesterday and today amid Russia-Ukraine deescalation talks and multiple city lockdowns in China due to fresh virus outbreaks.