Key facts
- Marine gasoil (MGO) prices in Europe are increasing at a faster rate than fuel oil.
- Tight supply is the primary driver for MGO price increases.
- Rotterdam's marine biodiesel blend sales in the second quarter surpassed those in Singapore.
- This marks the first time Rotterdam has outsold Singapore since the EU imposed anti-dumping duties on Chinese biodiesel in Q3 2024.
- The US-Iran war influenced demand and pricing dynamics for marine biodiesel blends.
Marine gasoil (MGO) prices in Europe are experiencing a more rapid increase than fuel oil, driven by constrained supply. This trend is highlighted by MGO prices in the ARA region rising 73.5% since February 28.
In a significant shift, marine biodiesel blend sales in the Port of Rotterdam during the second quarter surpassed those in Singapore. This marks the first instance of Rotterdam outperforming Singapore since the European Union implemented anti-dumping duties on Chinese-origin biodiesel in the third quarter of 2024.
Market participants noted a surge in demand following the commencement of the US-Iran war. Initially, the conflict altered pricing dynamics, leading to discounts for marine biodiesel blends. However, these discounts did not immediately spur significant demand growth, as evidenced by declining sales in the first quarter. Volatility in the market also contributed to hesitant procurement strategies.
As the war extended, demand increased, resulting in higher blend sales in the second quarter. An initial peace agreement on June 18 eased conventional fuel prices, restoring traditional market conditions where fossil bunker fuels were at a discount to marine biodiesel blends. However, the collapse of this agreement and the resumption of hostilities led to a sharp rise in oil futures prices, reintroducing discounts for some marine biodiesel blends.
Since hostilities restarted, B100 Advanced fatty acid methyl ester (Fame) in the Netherlands has averaged a discount of approximately $86 per tonne to MGO in ARA, when factoring in EU emissions trading system (ETS) costs for intra-EU voyages. Concurrently, Singapore's marine biodiesel prices, which had generally been cheaper than their European counterparts, saw significant gains, leading to a drop in sales.
For over 18 months, EU anti-dumping duties on Chinese-origin biodiesel had directed flows into Singapore's bunker pool, resulting in lower prices and higher sales volumes compared to Rotterdam. Between August 2024 and February 2026, B24 prices in Singapore averaged $753 per tonne (including EU ETS costs), versus $803 per tonne for the most competitive European option, B30 Advanced Fame and VLSFO in the Netherlands. In March-June of the current year, the latter averaged $1,080 per tonne, compared to $1,110 per tonne for B24 in Singapore. This price reversal is reflected in the sales data, with marine biodiesel blend sales in Singapore experiencing a sharp year-on-year and quarter-on-quarter decline in April-June.
Additional factors contributing to the rise in Rotterdam's sales include the Netherlands' unilateral implementation of the EU's renewable energy directive (RED III) mandates for international maritime transport this year. Some demand in the Mediterranean region for marine biodiesel blends, particularly from non-passenger vessels, may have shifted to Rotterdam due to more competitive pricing. Bio-LNG volumes continued to grow, offering a cost-effective option for FuelEU Maritime compliance. Bio-methanol sales more than doubled from the previous quarter, though they decreased year-on-year. Ethanol volumes were reported in Rotterdam's official port data for the first time, following an initial blend bunkering operation in May, positioning ethanol as a potential decarbonization solution for maritime transport.