High sulfur fuel oil (HSFO) enters H2 2026 at approximately $490/tonne, up 22% year-over-year, as marine bunker demand recovers and Middle East power generation peaks during summer cooling. Global fuel oil consumption is forecast at 6.5 million barrels per day in 2026.
Marine bunker demand is recovering to 4.5 mb/d as global shipping activity normalizes. Approximately 22% of the global fleet is now fitted with exhaust gas scrubbers, enabling HSFO consumption versus more expensive VLSFO.
Middle East power generation consumes 1.2 mb/d during summer peak, primarily in Saudi Arabia, Kuwait, and Iraq. Direct crude burning for power is declining as natural gas infrastructure expands, but fuel oil remains the marginal fuel.
The HSFO-VLSFO spread has averaged $80-100/t in H1 2026, incentivizing scrubber installation. Payback periods for scrubber retrofits are 18-24 months at current spreads.
Price projections for H2 2026 cluster at $450-550/t.
Fuel oil buyers should secure H2 requirements at $470-520/t through fixed contracts. Marine demand recovery provides structural support. For power generators, consider gas-to-oil switching economics. Budget $450-560/t for 2027.