- Singapore’s marine fuel demand is projected to rise in 2025, driven by high-sulfur fuel oil (HSFO) consumption due to longer shipping routes and increasing scrubber-fitted fleets.
- Competition from regional hubs like China’s Zhoushan and Malaysia’s Klang may pressure low-sulfur fuel oil (LSFO) prices and profits at Singapore’s bunker hub.
- Bio-bunker demand is growing, supported by FuelEU Maritime regulations and the push for greener fuel alternatives.
As part of the COMMODITIES 2025 series, this report explores the evolving trends shaping Singapore’s role as the world’s largest bunkering hub. While HSFO demand continues to grow amid geopolitical reroutes and the adoption of scrubbers, the market faces challenges from the regional competition, regulatory shifts, and the rise of green fuel alternatives, reports SP Global.
High-Sulfur Fuel Oil (HSFO) in the Spotlight
Singapore’s HSFO demand has surged, with sales rising 10% year-on-year from January to November 2024. This growth aligns with a 7.7% expansion in the global scrubber-equipped fleet, projected to increase by another 4.2% in 2025.
The Hi-5 spread—the price differential between HSFO and low-sulfur marine fuel oil—has narrowed. It remains sufficient to incentivize scrubber adoption.
Geopolitical tensions have caused ships to avoid Red Sea lanes, opting for longer Cape of Good Hope routes. It has boosted bunker frequency and HSFO demand. Russian fuel supplies to Singapore and reduced imports by China’s independent refineries are expected to maintain HSFO availability.
LSFO Faces Regional Challenges
LSFO demand in Singapore has weakened, with January-November 2024 sales down 3% year-on-year. Regional competition, particularly from China’s Zhoushan and Malaysia, and narrowing price spreads between these hubs have pressured Singapore’s LSFO premiums and supplier margins.
China’s government quotas for LSFO exports may influence Zhoushan’s competitiveness in 2025. Singapore’s LSFO premium over FOB values has fallen, impacting profit margins.
Green Transition Gains Traction
The FuelEU Maritime regulation, targeting a 2% greenhouse gas intensity reduction by 2025, has spurred interest in bio-bunker fuels. Singapore’s bio-bunker sales for 2024 surged 48.2% compared to 2023, supported by European and Japanese shipping companies’ term contract tenders.
Maersk Oil Trading, Singapore’s top bio-bunker supplier in 2023, acknowledged growing competition as other players scaled up volumes.
Record-Breaking Bunker Sales in 2024
Singapore’s total bunker sales for January-November 2024 reached 50.2 million mt, just 1.6 million mt short of the 2023 record.
HSFO accounted for a growing share of monthly sales, reflecting the market’s evolving dynamics.
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Source: SP Global
