Bunker fuel at the Russian Black Sea port of Novorossiisk tumbled Monday, amid pressure from the domestic fuel oil market and after previous falls at Istanbul, Turkey.

The 380 CST fuel oil grade at the Russian port fell $12/mt day on day Monday to $268/mt delivered.

Its discount to Istanbul moved to $27/mt, Novorossiisk’s most competitive level against Istanbul prices since May 19.

The fall was attributed to different factors. One was a delayed reaction to previous decreases at Istanbul.

Last October the IMO decided to cut sulfur limits for bunker fuels worldwide from 3.5% to 0.5% from the start of 2020. The impact is an estimated rise in the shipping industry’s annual bunker costs by up to $60 billion in 2020. Shippers have a variety of options in how they choose to address this sharp rise in fuel costs in less than three years.

380 CST fuel oil at the Turkish port fell to $293/mt delivered on June 15 from $305/mt on June 12.

Novorossiisk prices were stable over the period, edging down to $280/mt from $283/mt.

Another factor was Russian domestic prices for fuel oil.

Prices for high sulfur fuel oil in the Moscow Federal District have followed a downward trajectory since the start of June.

They were assessed at RUB 9,700/mt ($164.6/mt) FCA June 5 and at RUB 9,100/mt June 16, before rising slightly to RUB 9,200 June 19.

This decrease in Russian domestic fuel oil prices contributed to lower bunker fuel prices Monday, sources said.

Source: Platts