Asian Cargo Ships Struggle to Find Fuel Oil`
Asian cargo ships facing fuel shortages have become a major concern as fuel supplies from the Middle East continue to be disrupted. This situation is creating volatility in the marine fuel market and driving transportation costs higher.
Middle East Supply Disruptions
According to Reuters, the conflict in the Middle East has disrupted oil shipments passing through the Strait of Hormuz — one of the world’s most important shipping routes. Fuel oil, the primary fuel used by ships, is now becoming increasingly scarce. This has placed significant pressure on maritime transport activities across Asia. A trader in Singapore stated that the market is currently “struggling to find fuel” for late-month deliveries, while transportation costs are rising and alternative supplies remain inefficient.
Strait of Hormuz – A Critical Point in the Oil Market
Data from Kpler shows that:
- Oil exports through the Strait of Hormuz reach around 3.7 million tons per month
- About 1.2 million tons are shipped to Asia
- Around 70% of the supply goes to Southeast Asia
However, fuel tanker activity in the region has reportedly dropped by as much as 90%, raising serious concerns about supply shortages.
Marine Fuel Prices Surge
In Singapore — the world’s largest marine refueling hub:
- High-sulfur fuel oil (HSFO) prices have risen by more than 40%
- Low-sulfur fuel oil prices have increased by over 30%
The heavy dependence on Middle Eastern supplies has made the market highly vulnerable to disruptions.
Experts from Kpler noted that even a partial supply interruption is enough to quickly disrupt the balance between supply and demand.
Alternative Supplies Are Insufficient
Alternative supply sources include:
- The United States and Mexico (limited supply)
- Venezuela (mainly supplying Western markets)
- Russia (politically sensitive supply source)
In addition, Iranian oil — which China has heavily imported — is also being disrupted due to the conflict.
China Seeks to Secure Shipping Routes
China, which imports about 45% of its oil through the Strait of Hormuz, is reportedly negotiating with Iran to ensure the safety of vessels traveling through the area.
This highlights the strategic importance of the Hormuz shipping route for the global energy supply chain.
Asian Regional Supplies Also Affected
Some traders have shifted to purchasing fuel from Asian refineries. However:
- Many refineries have had to reduce operations
- The main reason is the shortage of crude oil from the Middle East
Data from Vortexa shows that only four oil tankers passed through Hormuz on March 1, compared to the previous average of 24 tankers per day. Currently, around 300 vessels remain anchored in the region.
Risk of Prolonged Shortages and Rising Costs
Low-sulfur fuel oil supplies from the Al-Zour refinery in Kuwait are facing bottlenecks. Although the market is still receiving some supplies from Brazil and Nigeria, these sources are unlikely to fully compensate for the shortage. Singapore currently still has fuel reserves available, but inventories are expected to decline in the coming period. The risk of shortages could continue pushing prices higher.
Conclusion
The fuel shortage affecting Asian cargo ships is not just a short-term issue and may continue if the conflict in the Middle East remains unresolved. As supply disruptions persist, the marine fuel market is expected to remain highly volatile, leading to rising global logistics and transportation costs.
