The ongoing attacks on commercial shipping in the Red Sea have significantly impacted global bunker demand. Increased travel distances and speeds have added 800,000 to 1,000,000 metric tons per month to the demand, forcing the bunker supply industry to adapt both in volume and location of supply.
Impact on Bunker Demand in Different Regions
- Africa: Mauritius has seen its demand double to 60,000-65,000 metric tons per month. Mozambique and Namibia have also experienced increased demand. In South Africa, volumes have dropped due to local refinery closures and disputes, but Cape Town has seen demand rise to 40,000 metric tons per month.
- Europe: The Canary Islands and Algeciras in Spain have reported increased demand, while the ARA region has risen to 1.58 million metric tons. Conversely, the Eastern Mediterranean has seen a decrease in demand.
- Asia and North America: Singapore’s demand has risen to 4.62 million metric tons per month, absorbing 40% of the increased demand. New York has also seen a rise to 400,000 metric tons per month.
Impact on Bunker Prices
Bunker prices have been influenced by increased demand, with notable rises in Mauritius and Cape Town. Prices relative to the Brent crude oil benchmark have generally increased, especially in high-demand ports like Singapore and the Canary Islands.
Future Demand Expectations
Current demand patterns are expected to continue, with suppliers making short to medium-term adjustments. Higher prices are likely to persist, reflecting the need for additional supply and infrastructure investments. The industry’s ability to adapt to these shifts demonstrates resilience, though future geopolitical disruptions may pose greater challenges.
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Source: IBIA
