- Bunkering Fuel Demand Drops as Shipping Industry Faces Volatility.
- Singapore and Fujairah Report 9% Decline in Marine Fuel Sales.
- Geopolitical Tensions and Tariffs Weigh on Global Bunkering Market.
Bunkering fuel sales at leading international refuelling centres have slowed because of increasing geopolitical tension and the tariffs imposed by the Donald Trump administration. Reuters quoted unidentified industry sources as saying that marine fuel sales at Singapore and Fujairah, the world’s largest and third-largest refuelling centres, totalled 9.78 million tons during the first two months of the year. This was a 9% fall compared to the previous corresponding period of 2024, according to official statistics, reports Oil Price.
Economic Activity and Freight Rates Under Pressure
The decline in bunkering fuel sales is closely linked to a slowdown in economic activity and lower freight rates. An industry source told Reuters, “There has been a bit of a slowdown in demand as economic activity is lagging. Freight rates are lower as a result as well.” The shipping industry has become increasingly cautious in optimizing its operations, given the volatility caused by tariffs and ongoing geopolitical tensions.
A chief executive of a container trading platform echoed these concerns, stating, “Shipping companies are now optimising their operations more cautiously to navigate volatile tariff conditions and geopolitical instability. The slowdown in marine fuel demand is a reflection of the broader uncertainty in global trade.”
Uncertainty Over the Drop in Fuel Demand
Unlike previous fluctuations, the current dip in demand for bunkering fuel is not being offset by increases at other ports. A trader from the industry told Reuters, “We are unsure where demand has vanished to. Typically if Singapore demand is slow, we might see an uptick in demand from other ports (in the region) but that’s not happening.”
This deviation has left stakeholders in the industry confused about the root causes of the falling fuel sales, without any apparent change in demand trends being witnessed in other alternative refueling centers.
Effect of Red Sea Disruptions on Last Year’s Demand
Conversely, there was an increase in demand for bunkering fuel last year, primarily caused by disruptions in the Red Sea. Shipping companies had to travel longer distances to avoid being attacked by Yemeni Houthi fighters on commercial ships affiliated with Israel and the West.
The Red Sea is the most direct route between Asia and Europe, but due to growing security threats, numerous shipping firms changed their routes by going around Africa. This doubled travel time considerably and consequently increased the demand for marine fuel. With geopolitical tension still influencing world trade, bunkering fuel demand prospects are shaky, with shipping firms adapting strategies to cope with unstable market fluctuations.
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Source: Oil Price
