Demand for marine fuels in Panama has increased since the start of the US-Iran war, as shipowners traveling to or from Singapore find more competitive prices there.
12 March 2026
Singapore’s very-low sulphur fuel oil (VLSFO) margin to Panama, which was historically traded as discount a discount to the Latin American hub, have flipped to a premium since the start of the war that reached $313.25/t on 9 March, its highest level in Argus historical data.
On 10 March, Singapore’s marine gasoil (MGO) premium to Panama was at $474.50/t. Its VLSFO premium was $214.25/t, and the high-sulphur fuel oil (HSFO) premium was $145/t.
Disrupted flows from the Mideast Gulf, along with regional supply constraints from countries such as China and South Korea, are expected to tighten supplies in Singapore, which prompted regional suppliers to raise offers for all conventional bunker grades to record levels.
Panama is a transshipment point for a large portion of general cargo leaving Asia for the Americas, so shipowners have been buying the minimum possible volume of bunker fuel in Asian ports to secure the largest possible volumes in the Americas at lower prices. As a result, availability for HSFO, VLSFO and MGO is reportedly tight and suppliers are requiring lead times of at least five days.
Transits through the strait of Hormuz, through which about 20pc of global oil flows, have not exceeded five ships in a day since the US and Israel attacked Iran on 28 February. Usually, about 138 ships transit the strait in a day.
Amid soaring bunker prices, demand for HSFO in Panama has grown at a faster pace than for VLSFO and MGO. With rising prices, scrubber-equipped vessels are prioritizing the cheaper fuel.
By Gabriel Tassi Lara
Photo credit and source: Argus Media
Published: 12 March, 2026
