Fears mount on ship fuel availability as Hormuz closure drags on
THERE are a lot of hypotheticals on how the Strait of Hormuz crisis will play out for shipping, and there is a very clear fallout effect that has already occurred: the price of bunker fuel has skyrocketed.
The average price of very low sulphur fuel oil across the top 20 bunkering hubs was $960 per tonne on Wednesday, according to data from Ship & Bunker. That’s almost double the cost prior to the war and the highest price since July 2022, after Russia’s invasion of Ukraine.
VLSFO pricing is driven by crude oil pricing. Brent closed up 10% on Thursday at $101.44 per barrel. Brent could go much higher if the strait doesn’t open soon— and there are no indications it will open soon — meaning that VLSFO pricing could go much higher.
The average price of high sulphur fuel oil across the top 20 hubs was $794 per tonne on Wednesday, also close to double the pre-war average. The HSFO average hit $886 per tonne on Monday, an all-time high.
The average VLSFO-HSFO spread at the top 20 ports was $166 per tonne on Wednesday, double the pre-war level and the highest average spread in two years.
Ships with scrubbers are allowed under IMO 2020 emissions regulations to burn cheaper HSFO. The higher the spread, the more that owners of scrubber-equipped tonnage save.
‘We are clearly in uncharted territory’
Executives and analysts voiced repeated warnings on the bunkering situation at the Capital Link International Shipping Forum in New York on Monday.
“First and foremost, the impact is the price of fuel,” said Bill Rooney, vice president of sea logistics at Kuehne+Nagel. Fuel price is “the biggest, most immediate effect”.
Joe Kramek, chief executive of the World Shipping Council, said, “It’s not just price, it’s availability. That is something to really watch.”
“We are clearly in unchartered territory,” said Maersk chief executive Vincent Clerc during a CNN interview on Wednesday.
“The big problem we have to solve now, with the strait closed, is that there is enough oil in the world, but there is not enough oil everywhere in the world. There are dislocations in the market, where some areas have plenty of fuel, and other areas could face shortages.
“We need to be proactive in moving fuel around so that when we come to ports, we actually have the fuel we need to keep powering our network — and that is something completely new.
“For me, the only parallel to this is Covid, when we had to do things we hadn’t tried before and we needed to familiarise ourselves with completely new areas, such as, in this case, moving fuel around the globe so we have the right amount in the right place at the right time.”
Scott Bergeron, fleet managing director at Oldendorff Carriers, told Capital Link attendees that the fuel issue was already affecting the ability to conclude forward business.
“When we try to rate some business today, we’re having trouble getting fuel indications. Availability for April is a big question mark.
“We’re seeing an unwillingness to rate the business. The market is looking for freight and owners and carriers are having a lot of difficulty offering commitments, with the big wildcard being bunkers. When you rate the business, you do it against what you expect the fuel price to be, because you need to either fix or hedge bunkers. And if you’re unable to get firm commitments, everything’s a big question mark,” said Bergeron.
Mads Boye Petersen, chief executive of Pangaea Logistics, said, “Companies like ours, which have large contract coverage, hedge exposure to fuel oil prices. It’s something that needs to be managed quite closely.
“When I think of the people in my office I’ve spoken to the most over the last week or so, its’s been about making sure we have effective hedges in place.”
Executives and analysts see multiple knock-on effects of surging fuel costs.
First, vessels across global trades will reduce speed to conserve bunkers. “It will definitely mean ships will go slower, and that will take supply out of the market,” said Martin Fruergaard, chief executive of Pacific Basin.
Second, the scramble to refuel could cause congestion at bunkering hubs. “If ships need to refuel and there are shortages at one port or another, that could cause clustering and congestion issues,” said Chris Robertson, shipping analyst at Deutsche Bank.
There could also be diversions, in addition to congestion. If a ship cannot obtain a refuelling commitment on its scheduled or preferred route, it would have to divert to another bunkering location, reducing trading efficiency.
Another possible consequence: lower competitiveness of older ships.
“We might have a market where older, less fuel-efficient ships struggle with a double-up on fuel prices,” said Fruergaard. “We haven’t seen scrapping for years, but depending on how the market is, there could be some scrapping if this continues.”
Different dynamics at regional hubs
Different pricing dynamics prevail at the key regional hubs: Singapore, Fujairah, Rotterdam and Houston.
According to Ship & Bunker data, the VLSFO price on Wednesday was the highest in Singapore, at $1,049 per tonne, with Fujairah not far behind, at $1,018 per tonne.
Pricing at European and US hubs was considerably lower. Rotterdam’s VLSFO price was at $748 per tonne, while Houston’s was at $685 per tonne.
“In Singapore, supply disruptions and panic among suppliers and shipowners have been driving bunker prices,” Siew Hua, global editor of marine fuels at price-reporting agency Argus, told Lloyd’s List.
“The supply tightness looks set to intensify in the region. Asian refiners are looking to curtail runs and secure domestic products in March and April because of crude supply disruptions from the Middle East.”
In Fujairah, falling drone debris halted barge operations on March 9. “Expectations appear mixed on the near-term supply situation,” she said. “Some suppliers have been told that loadings will start from most terminals today [Thursday] — security circumstances permitting. But there is little certainty surrounding security.
“European ports, including the ARA [Amsterdam-Rotterdam-Antwerp] bunkering hub, remain reasonably well-supplied in the short term. But with no likely end to the war in sight, concerns are growing over longer-term availability.”
European suppliers “are hesitant to offer or are doing so selectively, while buyers have been slow to enter the market since the start of the war, hoping to avoid the volatility in the market if they can”.
A major concern for carriers in the Asia-Europe trade, due to Cape of Good Hope reroutings, is the situation in South Africa.
According to Hua, “In South Africa, where there are already acute shortages in supplies, we’ve seen buyers purchase low-sulphur marine gasoil at more than double the prices seen just weeks ago.”
There is also growing worry in the Americas of “a coming supply crunch”, she continued.
“Prior to the disruptions to supply from the Middle East, refiners in Houston had already been facing a sharp decline in Mexican exports and reduced Canadian crude”, although “relief to this tightness can be expected from the return of non-sanctioned Venezuelan crude”.
Ship & Bunker data on the VLSFO-HSFO spread shows differing trends at the regional hubs.
In Singapore, Fujairah and Houston, the spread has risen sharply as HSFO has pulled back in recent days and VLSFO has continued to rise. Wednesday’s spread was $217.50 per tonne in Fujairah, $179 per tonne in Singapore and $138.50 per tonne in Houston.
“In Singapore, the spread has widened significantly as the port tends to be short, and heavily reliant on the Al Zour Refinery in Kuwait. Shipments from the refinery have been severely impacted since the war broke out,” said Hua.
In contrast, the VLSFO-HSFO spread in Rotterdam was just $51 per tonne, according to Ship & Bunker data. On March 9, this spread hit a low of $5 per tonne.
Hua said that the spread in Europe was so low because “the closure of the strait could affect the availability of HSFO in Europe”.
“At the same time, with VLSFO demand dropping off in Europe since the Mediterranean became an emission control area in mid-May 2025, stocks have been building, particularly with Europe being a VLSFO producer.
“Around 2.5m tonnes of VLSFO was sold to refuelling vessels in Rotterdam in 2025, the lowest since at least 2021, when the port started recording VLSFO sales,” she said, adding that “the increase in scrubber-fitted ships also supports HSFO sales in Rotterdam, which increased in 2025.”
Content Original Link:
" target="_blank">
