Middle East crisis reshapes marine fuel market and drives up shipping costs

The conflict in the Middle East is causing significant changes in the global marine fuel market, forcing shipping companies to reconsider their routes and bunkering strategies. Escalating tensions near the Strait of Hormuz and the Red Sea are forcing some vessels to take longer routes around Africa or shift to routes through the Atlantic Ocean. This increases fuel costs and complicates shipping operations. According to Bloomberg, shipowners are becoming increasingly concerned not only about prices but also about the availability and quality of bunker fuel at different ports.

Changes in shipping routes are redistributing demand among major bunkering hubs. Singapore, the world’s largest ship-refueling hub, continues to see growth in bunkering activity, while vessels are increasingly avoiding Fujairah in the UAE due to security risks. Meanwhile, demand for marine fuel is rising at ports in Mauritius, Southern and West Africa, Brazil, Sri Lanka and Pakistan. According to participants at the Sibcon shipping conference in Singapore, these developments are widening price differences between ports and placing additional pressure on alternative bunkering hubs.

One of the main challenges for shipowners is ensuring reliable fuel supplies at new bunkering locations. Unlike established bunkering hubs, less familiar ports often require companies to work with smaller or less well-known suppliers. This increases the risk of receiving fuel that does not meet required quality standards and makes quality control more difficult. Bunkering costs also vary considerably depending on supply sources, fuel availability and the level of port infrastructure development.

Amid market instability, shipping companies are changing their fuel procurement strategies. According to Frederik Guttormsen, Asia Pacific president at Stolt-Nielsen, bunkering can no longer be treated as a routine operational decision made shortly before a voyage. Companies are being forced to secure fuel in advance and monitor availability at key ports. Meanwhile, representatives of TFG Marine note that vessels are increasingly refueling more frequently but taking smaller volumes to reduce their exposure to price fluctuations and dependence on individual suppliers.

For global trade in grains, oilseeds and other bulk commodities, these changes create additional logistical risks. Longer shipping routes, rising bunker fuel prices and the need for more frequent refueling could increase maritime transportation costs and put upward pressure on freight rates. These costs could be particularly significant for agricultural exporters that depend on long-distance shipping routes and compete in markets highly sensitive to transportation expenses. Further developments will depend on maritime security in the Middle East, the stability of fuel supplies and the ability of alternative ports to meet growing demand.

Tags: shipping, fuel, marine fuel, Middle East