🕒 Created

Global Ship Fuel Shortage Driven by Middle Eastern and Russian Refining Disruptions

A global shortage of fuel oil, primarily used to power ships and power plants, is emerging due to significant refining disruptions in Russia and the Middle East. The US-Israel war on Iran has paralyzed key maritime trade routes, such as the Strait of Hormuz, while Russia’s war on Ukraine has led to Ukrainian drone strikes on major Russian refineries. These conflicts have reduced the net output of crude oil from key producing regions, forcing oil companies to prioritize more profitable products like diesel and jet fuel over fuel oil. Refiners are increasingly squeezing more diesel and petrol out of every barrel of crude oil to maximize profits. This shift has resulted in a market deficit of approximately 218,000 barrels per day in the third quarter. The shortage is particularly impacting Asia, where Singapore, the world's largest bunker hub, imports over half of its fuel oil consumption. Consequently, rising costs for ship fuel are being passed on to end users, with prices in Singapore rising 76 percent since the war on Iran began. Experts indicate that prices are likely to remain high until the conflicts in the Middle East are resolved.

Sources

Paywall and unreadable sources