Singapore: Marine fuel prices are expected to continue rising to record high this year on tightening supplies, worsening the expense headache for shipowners, according to shipbroker McQuilling Services.

The price of key grade 380 cst bunker fuel will average $690 per metric tonne in 2013, 2.7% higher than last year's $672 per metric tonne, McQuilling said in a report. Bunker prices will keep climbing to $760 per metric tonne by 2017.

“Bunker prices will rise slowly over the next three years,” McQuilling said, due largely to reduced exports from Iran and Russian squeezing supply. Simultaneously, more refineries are investing in cokers that convert leftover residual fuel into lighter products such as naphtha or heating oil to boost yields.

The global merchant fleet uses more than 370m metric tonnes of bunker each year, according to Freight Investor Services.