News
It has been over four years since the International Maritime Organization (IMO)’s global sulfur rules were introduced. In terms of scrubber uptake, the technology as expected became most popular with very large crude carriers (VLCCs), where 51% of the existing fleet have gone through installations, according to U.K. shipbroking house E.A. Gibson Shipbroker
Prior to implementation, there had been much speculation about potential lack of compliant 0.5% sulfur bunker fuel, the economics of installing exhaust gas cleaning technology and the future direction of Hi5 spread—the difference between high-sulfur bunker fuel (HSFO) and compliant very-low sulfur fuel oil (VLSFO).
Indeed, the Hi5 spread has proved to be volatile, fluctuating between a high of $485 per ton and a low of $60 per ton over the past four and a half years, being pulled in different directions not only by regional supply and demand factors and the fallout of the pandemic, but also by fundamental changes in oil prices and changes in global HSFO flows following the introduction of sanctions against Russia.
For VLCCs, it makes most practical sense, considering typically long distances involved and high bunker consumption. On an economic basis, the scrubber premium on the Middle East-China voyage has averaged $6,750 per day since Jan. 20, although it currently is around $5,000 per day due to a recent slide in the Hi5 spread.
