A global bunker fuel squeeze is threatening to drive up shipowners’ costs as inventories at three of the world’s biggest bunkering hubs fall around 30% below seasonal norms and Singapore VLSFO prices jump 76%.
Fuel oil inventories in Singapore, the Amsterdam-Rotterdam-Antwerp hub and Fujairah in the United Arab Emirates are around 30% below their three-year seasonal averages, according to data compiled by Reuters.
In Singapore, the world’s largest bunkering hub, very low sulphur fuel oil was priced at just under $825 per tonne on 1 September, up 76% since the Iran conflict began, according to maritime technology company ZeroNorth.
Brent crude rose about 40% over the same period, meaning marine fuel prices have increased substantially faster than the underlying crude benchmark.
The physical market is also tightening. Singapore suppliers were quoting VLSFO lead times of around nine to 16 days in early September as reduced supplier availability and shortages of blending components constrained prompt supply.
At Fujairah, heavy distillate inventories fell 15% in the week ended 31 August to 3.122m barrels, their lowest level in two months, according to Fujairah Oil Industry Zone data. Stocks had fallen 32% in the previous week. Fuel oil cargo availability and ex-wharf offers in Fujairah have also become limited as spot bunker demand strengthened, according to market participants cited by S&P Global.
The picture in northwest Europe is more mixed. Independently held fuel oil stocks in the Amsterdam-Rotterdam-Antwerp hub averaged 5.30m barrels in early September, 15% above the August average, according to Insights Global. But inventories remained 18% below February levels, while prompt bunker availability was tight and suppliers were recommending lead times of around five to seven days.
The supply squeeze is being reinforced by lower fuel oil exports and strong refinery incentives to produce higher-value products such as diesel, gasoline and jet fuel.
Energy Aspects expects the global fuel oil deficit to reach 218,000 barrels per day in the third quarter of 2026. That would be the first quarterly shortfall estimated by the consultancy since the third quarter of 2025, when the deficit was 6,000 bpd.
“Due to the protracted supply disruption in the Middle East, we expect fuel oil supply to remain critically tight in the third quarter,” Rystad Energy analyst Valerie Panopio told Reuters.
Russian fuel oil exports fell to a record-low 591,000 bpd in August from an average of more than 860,000 bpd in 2025, according to Kpler data going back to 2017.
Middle East fuel oil exports averaged about 447,000 bpd between March and August, down 45% from a year earlier. Kuwait’s Al-Zour refinery, previously a major exporter of fuel oil, shipped only one 26,000-bpd cargo between March and early September, compared with exports of around 191,000 bpd in January and February.
The tightening bunker market raises the prospect of higher voyage costs for shipowners if fuel availability remains constrained, particularly on long-haul trades where bunker consumption represents a significant share of operating expenditure.