War disruptions threaten global ship fuel supplies

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London: A global fuel oil shortfall for ships and power plants is imminent as hostilities impair refinery operations, crude processing, and tanker traffic. Refiners are progressively focusing on more profitable fuels like diesel, petrol and jet fuel, leaving less fuel oil available for the maritime industry.

The worldwide fuel-oil shortfall is expected to rise to 218,000 barrels per day in the third quarter, up from 6,000 bpd the previous year. Asia is projected to be struck the hardest due to its reliance on Gulf supplies, with Singapore, the world's largest bunker hub, most at risk.

Fuel stockpiles at important hubs such as Singapore, Amsterdam-Rotterdam-Antwerp, and Fujairah are already about 30% below seasonal averages. Singapore's very low sulphur fuel oil costs have risen 76% since the Iran war began, to approximately $825 per metric tonne.

The strain is also exacerbated by Ukrainian strikes on Russian refineries and problems at Middle Eastern facilities. As ships take longer trips to avoid risky waterways, fuel demand rises higher. Higher bunker costs may eventually drive up shipping rates and global logistics expenses.