IN Brief:
- Major bunkering hubs are no longer experiencing the acute marine-fuel squeeze seen earlier in the Iran conflict.
- Singapore VLSFO remains more than 60% above pre-war levels, while Fujairah bunker activity is around 40% of its previous level.
- Replacement barrels are available, but price and blending-component constraints continue complicating bunker procurement and voyage planning.
Marine fuel availability at major international bunkering hubs has improved despite continuing disruption around the Strait of Hormuz, reducing the immediate risk that ship operators will be unable to source fuel for scheduled voyages. The market remains expensive and uneven, however, with very-low-sulphur fuel oil in Singapore still priced more than 60% above levels seen before the conflict and bunker activity at Fujairah well below its previous level.
Industry participants at the APPEC conference in Singapore said the acute physical squeeze seen during March and April has eased as suppliers found alternative barrels and adjusted trading patterns. Emarat Maritime managing director Rishi Nyati said ship operators were currently able to obtain bunkers and load fuel, although the cost had risen materially.
Singapore has maintained comparatively steady fuelling activity through the disruption, reinforcing its role as the world’s largest bunkering hub. Prices have fallen from the peaks reached earlier in the conflict, but the remaining premium means shipowners, charterers, and cargo interests are still working with a substantially higher voyage-cost base than before Hormuz traffic deteriorated.
Fujairah presents a different operating picture. Repsol’s Max Tay estimated bunker activity at the UAE hub at around 40% of pre-war levels, showing how unevenly the market has adapted. A vessel that might previously have relied on Fujairah can instead bunker elsewhere, but changing the fuelling point affects voyage planning, congestion exposure, fuel carried between calls, and the timing of cargo operations.
The constraint is not simply the number of tonnes available. Marine fuels are blended to meet specifications covering sulphur, viscosity, stability, and other characteristics, and participants said uncertainty remains around obtaining some of the blending components required for particular grades. Replacement barrels may therefore exist while the material needed to turn them into a compliant bunker product remains more difficult or costly to secure.
That feeds directly into procurement. Bunker buyers have to decide where to lift fuel, how much to take, whether to carry extra inventory, and whether a cheaper nominal price is offset by deviation, waiting time, or a less reliable specification. A disruption can alter freight economics without creating an outright shortage if the available fuel is sufficiently expensive or inconvenient to source.
Some commodity traffic continues through Hormuz, limiting the extent of the physical shutdown. Industry estimates presented at APPEC put movements through the Omani corridor at roughly 10 to 15 oil transits a day in both directions. Those flows are far below normal conditions but still allow some crude and petroleum products to move, while traders seek replacement supply routes for barrels that can no longer travel as they did before the conflict.
The cost of replacement supply remains a limiting factor. Market participants said alternative barrels can be found, but higher prices mean some material may not enter the bunker market if buyers refuse to pay enough to make the trade viable. Availability and traded volume can therefore move in different directions: fuel exists, yet fewer transactions occur because the delivered price no longer works for ship operators.
For freight contracts, the consequences appear through bunker adjustment factors, spot quotations, and voyage calculations. Agreements negotiated before the disruption may contain mechanisms for passing on changes in fuel costs, but abrupt regional price moves can still create timing differences between the expense borne by an operator and the surcharge recovered from customers. Services tied to fixed port rotations have less flexibility than operators able to switch fuelling locations.
The current market also complicates inventory decisions. Carrying more fuel can reduce exposure to an uncertain next bunker call, but it uses vessel capacity and can involve buying at a high-priced hub. Running leaner fuel inventories preserves flexibility but leaves the ship more dependent on the availability and specification of supply at its next planned port.
Conditions at Singapore and Fujairah show why the easing of the initial squeeze should not be confused with normalisation. Singapore remains supplied but expensive, Fujairah is operating at a fraction of earlier activity, and traders are still dealing with uncertain blending components and costly replacement barrels. The immediate concern has shifted from whether fuel can be found at all to the price, grade, and location at which it can be obtained.
Persistent bunker premiums can raise landed costs, change routing choices, and make longer voyages less attractive, particularly where freight rates are already being pushed higher by security and capacity constraints. Those costs ultimately reach cargo owners even when fuel is embedded in a broader freight quotation rather than shown separately.
The next test is whether the replacement flows supporting today’s bunker market remain available as regional disruption continues. If suppliers can keep Singapore and other hubs adequately stocked, the risk of physical interruption will remain lower than it was in March and April. If blending stocks tighten or alternative barrels become too expensive to clear, the market could again move from a pricing problem towards a supply problem.
