The bunker fuel market is expected to register slow but steady growth in the near future thanks to the growing international commerce through sea routes, says an article published in The Market Plan.
Factors likely to drive bunker market
The market is expected to register a 3.1% CAGR during 2014-2020. Bunker fuel is made up of various oil extracts such as diesel, petroleum products among others.
Bunker fuel is a loosely coined term, used for various energy resources which make way for operating naval vessels.
Bunker fuels consist of major operating expenses for a ship and the high-reliance of ships on conventional forms of energy for reliability and cost-efficiency are likely to drive the bunker fuel market further in the near future.
Cost-effectiveness of transporting goods
Additionally, the cost-effectiveness of transporting goods through large sea shipments are also expected to drive growth of the bunker fuel market.
Increasingly global commerce is making way for more commercial cooperation and opportunities for several countries across the world. This is expected to run into a few roadblocks as well.
Growing environmental regulations, closely monitored trade routes, and dangers across unstable regions of the world can limit the growth of the bunker fuel market in the near future.
However, despite the limitations, the bunker fuel market will reach 460 mn tons of volume by 2020, according to a new report by Transparency Market Research.
Offshore Exploration a Key Opportunity
Offshore exploration has become extremely important for major players in the bunker fuel market. Declining reserves of oil, growing prices, and lack of feasible alternatives to petroleum are driving offshore exploration.
This activity is taking place across the world, however the activity is rampant in North Sea and the Atlantic Ocean.
Major countries like the US have provided incentives through national policy to explore oil reserves.
Dependency on oil reserves
Many key economies in the world are dependent on oil reserves to drive various commercial activities. Additionally, countries like the US with several Oil extracting giants with advanced technology stand to gain significantly from the current explorations.
The growing demand for oil, rising oil exploration activity, and booming exploration in Africa and the Middle East is also expected to drive growth for the bunker fuel market in the near future.
However, tightening environmental regulations like measures such as reduction in sulfur compounds can be a threat to market prospects. Sulfurous compounds make up a significant amount of bunker fuel products.
Hence, this regulation like the one recently passed in the EU are expected to lower sulfur compound compositions and limit the growth of the market.
Asia Pacific and Europe to Create New Opportunities
The global bunker fuel market is expected to register steady growth. Asia Pacific and Europe may play a key role in this development.
Singapore is becoming a leading hub for global commerce and it is likely to remain important in the near future. Additionally, China’s various commercial activities and its growing clout as a manufacturing hub are expected to drive significant growth in the bunker fuel market.
Europe’s trading activity
Moreover, Europe is also expected to play a key role as rising trade activity in the North Sea, Mediterranean, and Baltic are expected to result in significant advances for global commerce.
Additionally, the large capacity of EU markets to accommodate several new players is also expected to result in growth of commercial activity through growth in the bunker fuel market.
Many European companies are also undertaking large initiatives to up the oil exploration and offshoring activity, which will drive growth in the bunker fuel market.
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