The current oil price shock is making alternative fuels more cost competitive in the shipping sector. LNG benefits the most, becoming even more attractive compared to conventional bunker fuels. Methanol is also becoming more viable, strengthening the case for methanol-ready vessels. Still, the emissions benefits remain limited
Hormuz disruption has disrupted oil supply and pushed shipping fuel prices higher
• Alternative fuels more attractive now as oil shoots higher
• The oil shock narrows the methanol–oil price gap
• Ammonia remains on the radar: expensive now – promising in the long run
• LNG holds the best cards
• All eyes on IMO as shipping needs a global carbon price to decarbonise
• Cost, security and climate goals
• Alternative fuels more attractive now as oil shoots higher
The Middle East conflict and blockade of the Strait of Hormuz have disrupted oil supply and pushed shipping fuel prices, like marine gas oil (MGO), sharply higher. In this environment, fuel strategy is no longer just about cost, but also about securing supply and managing price risks. At the same time, higher prices and greater uncertainty are shifting the relative economics of alternative fuels, even as regulatory progress has slowed with the delayed introduction of a global carbon price under the IMO’s Net Zero Framework.
Prices for Marine Gas Oil spiked due to the closure of the Strait of Hormuz
MGO bunker prices in Rotterdam in $ per tonne; we’ll analyse two scenarios (....)