VLSFO market outlook rises amid higher crude forecasts and IMO regulations

The Very Low Sulphur Fuel Oil (VLSFO) market is undergoing significant shifts driven by rising crude prices and tightening maritime regulations. Ship & Bunker has raised its Q4 bunker price outlook by over $100/mt for the second consecutive month. This adjustment follows the U.S. Energy Information Administration (EIA) lifting its Q4 Brent crude forecast to an average of $104.69/bbl, up from previous estimates. Recent volatility in Brent prices was partly attributed to attacks on oil infrastructure and tankers in the Middle East.

Concurrently, the VLSFO market is projected to grow from $92.17 billion in 2025 to $160.45 billion by 2035, representing a CAGR of 5.70%. This growth is accompanied by a transition toward more complex fuel management. As the International Maritime Organization (IMO) implements stricter sulfur limits, such as the 0.10% threshold in the Mediterranean and upcoming regulations in the Canadian Arctic and Norwegian Sea, the industry is moving beyond simple fuel switching toward managing sulfur content, greenhouse gas intensity, and supply stability.

While the IMO's net-zero framework was initially expected to take effect in 2027, adoption discussions have been postponed, with further consensus-building meetings scheduled for 2026.