Regional disruptions are fragmenting bunker supply access globally, leaving some regions flush and others under strain — adding around EUR 4.6 bn in additional costs on the industry since the war began.

Why this matters: This is a logistics problem masquerading as an energy crisis. The pressure point includes both oil supply and access to fuel at the right place and time. The closure of Hormuz has forced vessels to reroute from the Gulf toward Asian ports, concentrating demand into fewer bunkering hubs, and breaking the link between supply and access.

The network

Disruptions are reshaping the network: As the world’s third-largest bunkering hub, repeated attacks on Fujairah have forced partial shutdowns, with suppliers declaring force majeure. Despite these disruptions, some market participants report ongoing operational continuity — “Fujairah, as of now, has ample product availability for bunker inquiries and operations are running fairly smoothly,” Senior Purchaser at Unicore Sean Burgin told EnterpriseAM.

Demand has all but vanished — with flows constrained, “demand has dropped to an almost standstill compared to the usual bunkering activity, which would result in some 40-50 bunkerings per day,” Burgin said.

What remains is limited: “The only bunkering still occurring [in Fujairah] is ship-to-ship from barges. Once those stocks are gone, bunkering stops entirely,” Tue Nielsen, CEO of Ofiniti, told the Financial Times.

Reliability is coming into question: That volatility has degraded the port as a dependable refueling node, pushing demand toward alternative hubs like Singapore.

Singapore is holding up, but the math doesn’t look great: Inventories have been building as authorities stockpile and shipowners delay purchases at elevated prices, but that buffer is expected to erode quickly, with several Singapore-based petrochemicals suppliers already issuing force majeure notices.

Prices have thus reacted accordingly: Very low sulfur fuel oil in Singapore jumped from USD 486 per ton in mid-February to around USD 1k by late-March, while in Fujairah it rose from USD 476 to USD 1.2k. Marine gas oil surged from USD 669 for Singapore and USD 747 for Fujairah to around USD 1.8k per ton for both hubs.

On the flip side, Atlantic bunkering hubs are holding up better. Asian buyers are “outbidding” Atlantic orders for spot fuel, pushing Singapore up USD 250 per ton over Rotterdam by late March – up from just USD 26 pre-war. Europe’s less exposed supply lines mean ships rerouted from the Gulf may face fewer bottlenecks.

The echoes

The shift is forcing vessels into unusual roles: Operators are taking the unusual step of skipping cargo altogether to transport fuel to where it’s needed. Tanker and container ships are increasingly being used to reposition fuel across routes, with some companies forgoing cargo to load additional bunker volumes, as some voyages between US and Singapore have become an ad hoc fuel corridor.

But the shift hasn’t scaled: “The impact has been limited, there was a short term focus when bunker prices peaked in the second week of the conflict and stem sizes for bunker orders were minimized,” Burgin said.

The behavior reflects the scale of the fuel shock hitting the industry. Shipping lines are already paying the price — as firms with long-term fuel contracts are still exposed through quarterly price resets, as the surge in prices added some USD 82k per day to the operating cost of a large crude tanker. Across the industry, fuel now accounts for some 60% of a ship’s typical operational costs.

The costs are being passed on: Maersk says it has “no alternative” but to introduce a temporary emergency bunker surcharge to cover fuel availability and cost, while Hapag-Lloyd noted it’s absorbing an additional USD 40-50 mn per week in costs, driven primarily by fuel.

The disruption is large enough to distort the transition narrative. The spike in bunker prices has narrowed — and in some ports eliminated — the cost gap between conventional and cleaner fuels. That flips a long-standing argument: the issue is no longer that green fuels are too expensive, but that fossil fuels are structurally volatile under geopolitical stress.

The major anxiety: What happens if the Red Sea joins the closure trend?

Longer routes raise fuel demand, but regional bunker hubs may see demand dampen. “This will result in bunker ports such as West Africa, Port Louis, Salalah, amongst others, seeing a rise in bunker demand,” Burgin told us.

The system adapts, but at a cost: “The longer the disruption occurs, the more vessels amend their bunker lifting patterns as they adapt to secure fuel in ports that meet their requirements commercially and operationally,” Burgin adds. That adjustment keeps the system moving, but pushes it toward longer routes, higher consumption, and a more fragmented fueling map.

Our take

Demand is being reshuffled across the system, with some ports scaling supply while others are tightening. The longer disruptions persist, the more bunker hubs — reliant on Gulf-linked flows — will be forced to source from alternative markets.

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