High-sulfur fuel oil prices at West Africa’s floating supply hubs fell yesterday to €498 per metric ton. The decline is reducing Atlantic suppliers’ margins and forcing Tenerife to recalibrate its regional pricing strategy, according to data from Las Palmas-based ship agents.
Tight Atlantic margins reflect the reordering of trade flows along the Cape of Good Hope route. The diversion of LNG carriers and container ships around southern Africa is generating unprecedented demand for marine fuel. The waters off Dakar, Lomé and Santa Cruz de Tenerife have become the main arena where major global energy companies compete.
Tenerife closed yesterday’s trading with very low sulfur fuel oil (VLSFO) at €542 per metric ton, maintaining a €14 premium over Gibraltar and Algeciras. Local suppliers in Santa Cruz are absorbing higher freight logistics costs to defend their market share against offshore operations in West Africa, where ship-to-ship (STS) transfers operate with reduced port fees and a lighter regulatory burden.
Commercial sources in London and Geneva estimate that floating deliveries off the coasts of Togo and Benin reached 85,000 metric tons last week. Fuel supplied from floating storage units off Lomé was priced at €512 per metric ton of VLSFO, setting an aggressive differential that is testing the advantages of Tenerife’s physical infrastructure.
The pressure from West Africa’s floating supply
Lomé and Dakar are using flexible regulatory frameworks to attract bulk carriers and container ships. Barges operating 12 nautical miles off Senegal’s coast delivered intermediate fuel oil at €480 per metric ton yesterday, capturing Asia-bound volumes seeking rapid bunkering without paying Iberian anchorage fees.
Operations around West Africa face structural constraints. Demurrage costs, supply-chain opacity and inconsistent quality in high-sulfur blends pose a constant risk to international fleet managers. An operations director based in Rotterdam said offshore delivery delays in the region averaged 36 hours last month, compared with fewer than eight hours in Santa Cruz.
Infrastructure limitations hamper the distribution of liquefied natural gas (LNG) and biofuel blends along the African coast. The use of smaller barges, of around 3,000 deadweight tons, limits the volume of each open-sea refueling operation. Deep-draft vessels are forced to accept partial deliveries or incur additional costs from deploying multiple vessels.
Tenerife’s logistics response
Santa Cruz de Tenerife is countering African prices with a plan focused on high-flow barges and alternative marine fuels. The port’s ability to offer simultaneous operations—bunkering alongside crew changes and the provisioning of supplies—creates savings in the total cost of a port call that offset the fuel-price gap.
Companies such as Maersk continue to maintain their bunkering calls in Tenerife, supported by predictable turnaround times and compliance with the standards of the European Union’s FuelEU Maritime regulation. VLSFO blended with biofuel closed yesterday in Tenerife at €685 per metric ton, a product unavailable at West African anchorages.
Competition with Las Palmas and mainland Spain
Las Palmas de Gran Canaria closed yesterday’s session with VLSFO at €538 per metric ton, retaining its volume leadership in the archipelago. Combined supply volumes in the Canary Islands exceeded 2.4 million metric tons over the past 12 months, driven by traffic diverted from the Red Sea.
Gibraltar and Rotterdam continue to set European market benchmarks. VLSFO in Rotterdam was priced at €492 per metric ton yesterday, while Gibraltar set its price at €528. The €14-to-€50 differential between the northern European hub and Atlantic ports reflects the freight cost of transporting refined products from northern refineries.
Refineries in the Middle East at Al-Zour and Ruwais are sending VLSFO cargoes directly to West African storage hubs without passing through Mediterranean intermediaries. This direct flow threatens to narrow the price gap between African anchorages and European hub ports over the coming quarters.
Regulatory requirements and carbon impact
The expansion of the EU Emissions Trading System (EU ETS) to maritime transport adds a cost of €38 per ton of carbon emitted on voyages calling at EU ports. Bunkering in Tenerife subjects shipowners to EU ETS compliance costs, while supply in West Africa remains outside European carbon taxation.
Shipowners weigh the direct cost of fuel against their regulatory obligations. Although bunkering in West Africa offers immediate savings on marine gasoil and VLSFO, vessels flying EU flags or operating routes bound for European discharge ports face subsequent carbon audits that reduce the margin gained in international waters.
The Atlantic bunkering market remains directly dependent on crude oil. Brent crude closed yesterday at €66.40 per barrel, equivalent to €417.60 per metric ton, keeping refining margins tight and forcing marine-fuel suppliers to compete through logistical efficiency and credit facilities.
The article “Tenerife and West Africa vie for Atlantic bunkering dominance” was first published on canarymaritime.com.
