The ongoing conflict in the Middle East has done more than push conventional bunker prices higher — it has fundamentally shifted the cost equation for shipowners weighing biofuel blends against traditional marine fuels under European emissions regulations.
According to an analysis by Ship & Bunker, biofuel blend prices have proven far more resilient to the Middle East supply shock than conventional bunker prices, given that biofuel production is largely located outside the conflict zone.
A Tale of Two Price Movements
Ship & Bunker reports that the average VLSFO price at Rotterdam this month has risen 73% compared to pre-war levels recorded in February, while Rotterdam B30 blends saw a comparatively modest 31.5% increase over the same period.
In concrete terms, VLSFO at Rotterdam has averaged $796.78/mt this month, up from $460.53/mt in February. B30, meanwhile, has averaged $990.28/mt in May, compared to $753.28/mt in February.
The Full Compliance Picture
When accounting for the total cost of compliance — including the EU Emissions Trading System (EU-ETS) and FuelEU Maritime pooling obligations — the shift becomes even more pronounced.
Ship & Bunker estimates that Rotterdam B30 now costs $127.74/mt less than VLSFO on an intra-EU voyage this month, a dramatic reversal from the $12.40/mt discount recorded in February. On EU-to-non-EU voyages, B30 carries a $32.88/mt premium this month — significantly lower than the $140.17/mt premium seen in February.
The analysis notes that EU-ETS and FuelEU compliance costs have remained largely static since the conflict began. Each tonne of intra-EU VLSFO consumption requires 3.2 European Union Allowances (EUAs), compared to 2.24 EUAs for B30 — with half those amounts applying on EU-to-non-EU voyages. As a result, intra-EU EU-ETS compliance costs for VLSFO were approximately $282/mt both this month and in February, while B30’s compliance costs held near $198/mt across both periods.
Under FuelEU Maritime’s pooling framework, VLSFO users bear a pooling cost of around $17.50/mt for intra-EU voyages this month, while B30 users earn pooling revenues of approximately $219.10/mt — figures that have remained relatively stable compared to February.
Will the Advantage Hold?
Ship & Bunker cautions that the current cost advantage for biofuels is unlikely to persist indefinitely. The publication notes that biofuel blend sales at Rotterdam rose 0.6% year-on-year to 104,630 mt in the first quarter, while conventional bunker sales at the port dropped 28.1% over the same period. Further demand growth is expected in the second quarter.
Additional demand-side pressure is expected from the Netherlands’ implementation of the RED III regulation, which introduces quotas for renewable fuel sales by bunker suppliers starting this year. Ship & Bunker observes that increased biofuel demand is likely to push biofuel premiums higher relative to fuel oil, while FuelEU pooling values may also decline as the market adjusts.
Does This Matter to You?
For shipowners, operators, and charterers operating within or through EU waters, this analysis is directly relevant. The narrowing cost gap between biofuel blends and conventional bunkers — when full compliance costs are factored in — may prompt a reassessment of fuel procurement strategies, particularly for intra-EU voyages where B30 now represents a meaningful cost saving according to Ship & Bunker’s estimates.
Bunkering traders and port-based suppliers at Rotterdam and other EU hubs should also take note of the demand dynamics described, as shifting compliance economics could accelerate the rotation toward biofuel blend volumes in the near term. The implementation of RED III in the Netherlands adds a structural supply-side element to this shift.
For those managing FuelEU Maritime pooling positions, the changing relationship between biofuel premiums and pooling values warrants close monitoring as market conditions evolve.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
