SINGAPORE: More ships are coming to Singapore as the war between Iran and the US disrupts shipping routes, although fewer are here specifically to refuel.
Experts told The Straits Times this is because ships have become more conservative in buying fuel as prices have been extremely volatile due to the Middle East conflict. Some ships are also travelling slower to conserve fuel, a practice known as ‘slow steaming’, they added.
Even so, shortages of marine fuel or bunker are not expected in Singapore, which is the world’s largest bunkering hub.
In April, a total of 10,873 ships called at Singapore, 3 per cent more on a yearly basis. This continues an uptrend from March, when 11,591 ships came here, marking an 8.7 per cent rise year-on-year, based on data from the Maritime & Port Authority of Singapore (MPA).
Ships that arrive in Singapore may seek to refuel, though they may also stop for other purposes such as repairs, crew changes, or to transfer cargo.
Some 3,438 vessels that called in April specified bunkering as the main purpose, according to MPA data. This is slightly lower than a year ago, when the number was 3,504.
Similarly, bunker sales here in April saw a 1.2 per cent dip over the same period to 4.35 million tonnes, the data showed.
Instead, more ships came to Singapore specifically for cargo matters, supplies and other unspecified reasons.
Siti Zaini, regional manager of Asia at the International Bunker Industry Association, said that when prices more than double in a matter of weeks, shipowners bunker only the amount of fuel they need to reach the next port.
This means that each vessel might buy less fuel even if more vessels call at the port.
On the supply side, one possibility is that suppliers may be pulling back on large forward purchases, she said. This is because extreme price volatility makes holding significant amounts of fuel a costly risk.
She added: “The war has simultaneously driven vessels toward Singapore while making each of those vessels buy less, with per-vessel fuel uptake being compressed by price-driven behaviour on both the supply and demand side.
“With the situation in the Middle East still unresolved, we expect this volatility to persist over the next three to six months and bunker sales to fluctuate accordingly.”
Coface chief economist for Asia-Pacific Bernard Aw also noted that while more vessels called in Singapore in April, the cargo amount they carried fell by 1.2 per cent.
He added: “Container shipping speeds have also declined sharply - a practice known as slow steaming - to conserve fuel amid higher bunker prices. This may have contributed to more restrained demand for bunker fuel in April.”
CMC Markets Singapore sales trader Oriano Lizza added that bunker demand does not respond directly to increased vessel traffic. Operators, when faced with fuel price spikes, prioritise margin protection, he said.
Ships ‘slow steam’, defer non-essential refuelling, buy less fuel or lift fuel at cheaper ports. This can temporarily suppress reported sales, even as Singapore’s role in the routing network expands, he said.
“Singapore’s position as the world’s dominant bunker hub remains strong. The market now faces a period where price, routing, and fleet behaviour pull in different directions.”
Singapore’s bunker advantage
Despite that, Singapore remains by far the world’s top bunkering port, supplying about 57 million tonnes of marine fuel in 2025.
With shipping lines rerouting away from the Middle East, where another major bunkering hub in Fujairah has been affected by the closing of the Strait of Hormuz, the Republic is a natural bunkering stop for vessels travelling between Asia, Europe, the Middle East, and Africa.
Singapore is also located along the Strait of Malacca, one of the world’s busiest shipping lanes.
“This gives vessels an efficient point to take on fuel without significant deviation from major trade routes,” said Siti.
She added that Singapore also has extensive port infrastructure, large fuel storage capacity, efficient vessel turnaround times, and a deep network of suppliers and traders to support ships and their crew.
“In addition, Singapore is known for regulatory reliability, fuel quality standards, transparent pricing, and the ability to source fuel from diversified suppliers. This gives shipowners confidence in supply security and operational certainty.”
She noted that Fujairah is the Middle East’s main bunkering hub and a key refuelling stop for vessels transiting the Strait of Hormuz and the Indian Ocean.
But with those routes effectively disrupted since the war began in late February, Singapore has emerged as a natural alternative due to its scale, reliability and lower geopolitical risk, as well as its ability to absorb additional demand through diversified fuel supply sources.
Economists at Coface noted that bunker sales in Fujairah declined sharply, falling by 70 per cent compared with February and by 75 per cent year on year.
CMC Markets’ Lizza said: “Singapore’s position as the dominant global bunkering hub has strengthened as the Middle East conflict diverts demand from Fujairah.”
Rystad Energy analyst Yu Junlin added that the balance of evidence indicates Singapore is capturing some displaced bunkering demand, but it is not a simple one-for-one substitution for Fujairah or other Gulf of Oman ports.
Siti also noted that a prolonged conflict could also increase the urgency for Singapore to expand its infrastructure and alternative fuel capabilities, as shipping companies place greater value on reliability, diversified supply chains and operational certainty.
Yu added that this could strengthen Singapore’s position as a reliable global bunkering hub, especially if it maintains stable fuel supplies while expanding the availability of liquefied natural gas, biofuel and methanol as greener alternatives.
Fuel prices volatile, but supply stable
Ships transporting goods from crude oil to car parts are having to reroute around the Middle East at a time when fuel prices have become increasingly volatile as conflict drags on, although supply appears to be stable for now.
Siti noted that bunker fuel prices in Singapore have been volatile in recent months, reflecting broader supply chain uncertainties.
The price of very low sulphur fuel oil (VLSFO) in Singapore peaked at US$1,450 per tonne on March 9, a rise of about 182 per cent from US$515 on Feb 27 - the day before the US-Israeli attack on Iran.
More recently, VLSFO prices have dropped below US$1,000, although this is still significantly higher than the pre-conflict price.
Meanwhile, high-sulphur fuel oil (HSFO) in Singapore peaked at US$1,200 per tonne on March 9, an increase of about 173 per cent from US$439 on Feb 27. The price fell to around US$700 at the end of April.
VLSFO and HSFO are bunker fuels used by ships, but with different sulphur content and environmental implications. VLSFO is now the dominant bunker fuel sold in Singapore.
Yu said bunkering companies have raised concerns over the volatile bunker prices. While hedging against price swings is common practice in the industry, such strategies have their limits during unusually turbulent periods like the current one, making it harder for traders to manage risk, she added.
Industry insiders said bunker supplies are adequate and there is no need to worry about shortages.
MPA said in April in a televised interview that bunker prices have increased but that bunkering supplies have remained stable because of Singapore’s diversified fuel supply networks. When one source is disrupted, providers can simply source from another.
Siti said that in general, global bunker fuel supply can tighten periodically due to oil supply shocks, geopolitical conflicts, sanctions, refinery outages, or shipping disruptions. This usually results in higher prices and regional supply tightness.
“However, Singapore is relatively well-positioned to manage such risks given its diversified sourcing network, extensive storage capacity, deep ecosystem of traders and suppliers, and strategic location along major shipping routes,” she said.
“As such, the main risk for Singapore is not an outright shortage, but ensuring reliable and competitively priced fuel supply during periods of market volatility.”
Yu said the immediate effect of the conflict has been higher bunker costs and less pricing flexibility, rather than major supply delays or shortages.
Still, she conceded that “if the disruption drags on, that could change, and both pricing pressure and waiting times would become more important to watch”. - The Straits Times/ANN
