As the security situation in the Red Sea remains volatile, shippers and exporters are actively exploring alternative ocean transportation routes. The escalating attacks on merchant ships in the region have prompted concerns, with industry sources estimating that around 35,000 ships passing through the Red Sea annually could be impacted, says an article published on sp global website.
Summary
- The volatile security situation in the Red Sea is leading shippers and exporters to explore alternative ocean transportation routes.
- Shippers are turning to alternative bunkering ports in East/West Africa and the Arabian Gulf to avoid disruptions and increased freight costs.
- Global bunker company Glander International Bunkering notes a significant increase in bunker demand in specific ports, including Durban, Port Louis, Canary Islands, Salalah, and Fujairah.
- The extended threat in the Red Sea poses challenges for ship and freight forwarders, potentially leading to disruptions and increased freight costs.
- As vessels reroute away from the Red Sea, the demand for fuel oil is expected to increase in South Africa.
- While South Africa has been meeting the additional demand for bunker fuel, concerns arise about whether the country is fully prepared for a drastic surge in demand.
Impact On Bunkering Ports And Global Shipping Routes
With the continued threat in the Red Sea, shippers are turning to alternative bunkering ports to avoid disruptions and increased freight costs. Ports in East/West Africa and the Arabian Gulf are emerging as preferred choices for fueling, as they provide a more secure environment amid the heightened risks in the Red Sea.
Increased Bunker Demand In East/West Africa And Arabian Gulf
Global bunker company Glander International Bunkering notes a significant increase in bunker demand in specific ports, including Durban, Port Louis, Canary Islands, Salalah, and Fujairah. This surge in demand is attributed to shippers opting for alternative routes and refueling locations due to the uncertainties in the Red Sea.
Challenges And Disruptions In Global Shipping
The extended threat in the Red Sea poses challenges for ship and freight forwarders, leading to potential disruptions and increased freight costs. Moving goods around Africa, as an alternative, can add up to 30 days to a voyage. This has consequences for lead times, barge schedules, and cargo/supplier availability, resulting in higher premiums and potential disruptions to bunker plans.
Impact On Fuel Oil Distribution To South Africa
As vessels reroute away from the Red Sea, the demand for fuel oil is expected to increase in South Africa. Container vessels, in particular, are likely to contribute to this surge in bunker fuel demand. Durban, a major hub in South Africa, has been covering the additional demand so far, with West Africa, including the Canary Islands, expected to play a contributing role.
Concerns About South Africa’s Preparedness For Increased Bunker Demand
While South Africa has been meeting the additional demand for bunker fuel, concerns arise about whether the country is fully prepared for a drastic surge in demand. Observers note that South Africa might need a significant amount of oil to accommodate the increasing demand for bunker fuel.
Bunker Fuel Prices And Shifting Dynamics
As ships reroute through the Cape of Good Hope, bunker fuel prices at South African ports, particularly Durban, could see an increase in the coming days. Bunker fuel prices at Durban, as of January 12, were assessed at $700/mt for marine fuel 0.5% and $595/mt for bunker fuel oil 180 CST, both showing a day-on-day increase of $5/mt.
The evolving situation emphasizes the dynamic nature of global shipping routes, bunker demand, and fuel prices as industry participants adapt to the changing geopolitical landscape.
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Source: sp global
