Impact Of Red Sea Crisis On Bunkering Sales: IBIA Insights

• The International Bunker Industry Association (IBIA) delves into the repercussions of the Red Sea crisis on bunkering sales, examining changes in volumes, supply challenges, and future demand expectations.
• While some regions witnessed a notable surge in sales, others experienced shifts in demand patterns, particularly towards Mediterranean ports.
• Estimates indicate a 15-20% increase in sales, mainly in Very Low Sulphur Fuel Oil (VLSFO) and Light Sulphur Marine Gas Oil (LSMGO).
• Supply challenges, extended lead times, and price increases of $50-100/MT have been reported, prompting proactive dialogues to address future demand and mitigate uncertainties.

Impact on Bunker Volume Sales

The IBIA notes a discernible rise in bunker volume sales in select regions, with varying effects on different stakeholders. The crisis has led to increased demand, but this surge is not uniform across all entities. Some ports, such as Port Said, have seen a reduction in demand, while others, like Mediterranean ports, experienced a notable increase. Specific estimates suggest a 15-20% uplift in sales, primarily in VLSFO and LSMGO.

Quantification of Changes

Efforts to quantify the changes in bunkering sales reveal estimates ranging from 15-20%, with particular increases noted in VLSFO and LSMGO, ranging from 5-10 kilotons per month. However, not all stakeholders are willing to disclose precise figures, adding an element of confidentiality to the quantification process.

Supply Challenges and Responses

While many entities have successfully met the increased demand, challenges such as extended lead times and price increases of $50-100/MT have been reported. Entities are addressing supply issues through increased activities, exploring partnerships with local suppliers, and expressing concerns about fuel quality deterioration.

Future Demand Expectations and Planning

The IBIA anticipates a further increase in bunker demand, especially in South & West Africa, with ongoing infrastructure improvements and proactive dialogues with ship operators. Stakeholders are engaging in forward-looking approaches, considering both short-term contracts and long-term cooperation to secure supplies for 6 to 12 months. The uncertain landscape of low-carbon fuel adoption adds complexity to future demand planning.

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Source: Safety4sea