Global marine fuel sales saw a significant increase in 2024 as ongoing attacks by Yemen’s Houthis, which began in late 2023, forced many shipping companies to divert vessels around southern Africa instead of using the Red Sea and Suez Canal. This led to longer voyages and higher fuel consumption, boosting demand for marine fuel, also known as bunker fuel.
Record Bunker Sales in Key Ports
- Singapore recorded a new high of 54.92 million metric tons in 2024, averaging around 955,000 barrels per day (bpd).
- United Arab Emirates’ Fujairah saw its first annual increase in bunker sales after years of decline.
- Rotterdam marine fuel sales rose 12% in the first quarter of 2024 to 2.16 million tons (38,000 bpd) from the previous quarter and remained strong throughout the year.
Impact of Longer Routes on Fuel Demand
The diversion of ships around the Cape of Good Hope increased travel distances and fuel consumption. “Diversions have indeed increased tonne mileage due to longer routes, which has boosted demand for fuels in ships,” said Aldo Spanjer of BNP Paribas.
Future Outlook: Red Sea Route Uncertainty
In January 2024, the Houthis announced they would limit attacks to Israeli-linked ships after a ceasefire in Gaza, raising hopes for a return to the Suez Canal route. However, analysts remain cautious:
- BNP Paribas’ Aldo Spanjer and FGE’s Stephen Brennock warned that if northbound transits through the Suez Canal resume, bunker fuel demand could decline.
- Shipping executives are still hesitant to use the Red Sea route due to ongoing security concerns.
Rotterdam Fuel Demand Trends
- The rise in high sulphur fuel oil (HSFO) demand from large vessels drove Rotterdam’s fuel sales in early 2024.
- However, overall Rotterdam bunker sales dropped by 1% year-on-year to 9.06 million tons (158,000 bpd), weighed down by weaker demand for very low sulphur fuel oil (VLSFO).
The future of marine fuel demand will largely depend on whether global shipping routes normalize or if geopolitical risks continue to disrupt trade flows.
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Source: Reuters
