Middle East tensions and Strait of Hormuz closure drive bunker fuel prices to historic highs, impacting global markets and humanitarian efforts.
Increasing tensions in the Middle East and the closure of the Strait of Hormuz have led to sharp price fluctuations in the global bunker fuel market. With disruptions in the oil supply chain, bunker fuel prices have surged to historic levels in many regions, particularly in Asia.
In Singapore, bunker fuel prices have risen above $1,100 per ton, exceeding Brent crude oil prices by more than 60%. Under normal circumstances, bunker fuel is cheaper than crude oil; however, this relationship has reversed due to supply constraints affecting refineries in the Indo-Pacific region.
The supply shock has also brought about geographical price disparities. While bunker prices at fuel terminals stretching from Fujairah, which provides quick access to the Asian market, to Long Beach are around $1,100 per ton, prices in more distant centers like Houston, New York, and Rotterdam are approximately $320 lower, reflecting a 30% discount.
Significant changes are also being observed in fuel trading. Major consumers like Maersk are attempting to secure fuel supply through their own organizations in anticipation of potential supply shortages. According to Quantum Commodity Intelligence, transaction volumes in Fujairah have fallen to their lowest levels since the COVID-19 pandemic.
Some traders in Singapore are avoiding new orders due to price volatility. It is reported that stocks in the market are limited and supply is being provided only to specific customers. In the marine fuel market, particularly Marine Gas Oil (MGO) prices have increased by 160% since the onset of the conflict, while strong rises have also been recorded in medium distillate products such as diesel and jet fuel.
Rising costs are expected to be passed on to the final consumer through tenants and cargo owners. The World Food Programme has warned that the rise in energy prices could have serious consequences, particularly for sectors involved in humanitarian aid. The increase in fertilizer prices due to the closure of the Strait of Hormuz is further driving up food costs.
According to the program, if the crisis persists, the rate of extreme hunger could increase by 20% in some regions of Africa and by 25% in Asia. It is noted that countries heavily dependent on imports, such as Sudan, will be the most affected by this situation.
Source: SeaNews Türkiye
