India Emerges As Bunkering Hub Amid Red Sea Shipping Shift

By
Mfame Editor
-
15

The surge in bunkering and Ship-to-Ship (STS) calls at Indian ports underscores a significant shift in regional shipping patterns, driven largely by geopolitical and economic factors. Here’s a summary of the key developments:

Highlights of Increased Bunkering and STS Calls

  1. India’s Growth:
    • Bunkering and STS calls in India increased by 55%, rising to 11,228 from 7,241 in 2023.
    • Total bunker fuel demand in India reached 2.25 million metric tonnes, a notable rise attributed to competitive pricing and policy changes.
  2. Sri Lanka’s Parallel Rise:
    • Sri Lanka, a key regional competitor, experienced a 51% growth, with calls increasing to 2,347 from 1,551 during the same period.
  3. Shift in Shipping Routes:
    • Rising attacks in the Red Sea have led shipowners to avoid the area, opting for longer routes around Africa.
    • This shift has significantly boosted demand for bunker fuel in Indian ports, as vessels require refuelling during extended voyages.
  4. Favourable Policies in India:
    • Removing excise duty on marine gas oil has made Indian ports an attractive bunkering option.
    • Competitive pricing is expected to continue fueling growth in 2025.

Implications for India and Regional Competition

  • India’s Strategic Position:
    • Indian ports are leveraging their geographical advantage and favorable pricing to position themselves as regional bunkering hubs.
    • The rising demand could further strengthen India’s role in the global shipping network.
  • Competition with Sri Lanka:
    • Sri Lanka’s significant growth highlights its competitive potential, but India’s larger scale and policy-driven advantages may give it the upper hand.
  • Future Outlook:
    • As geopolitical tensions persist and global shipping patterns adapt, India is well-positioned to capitalize on growing demand, with continued growth likely in 2025 and beyond.

This trend emphasizes India’s growing importance in maritime logistics, driven by strategic policies and external shipping disruptions.

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Source: S&P GLOBAL