Shipowners Face Fragmented Fuel Market as Bunker Quality Concerns Grow

Shipowners are dealing with an increasingly fragmented marine fuel market in mid-October 2026, as a new wave of attacks on tankers in and around the Strait of Hormuz puts renewed pressure on Middle East oil flows. Fuel is still available in most major ports, but it is no longer reliably available where vessels need it, and the gaps in price and quality between bunkering locations are widening. At the Singapore International Bunkering Conference (SIBCON), held from October 13 to 15, industry leaders described a market where buying fuel has become a strategic decision rather than a routine last-minute purchase.

The latest tightening follows a sharp escalation at sea. According to data from Kpler, 10 tankers were struck in the strait between September 28 and October 4, a record for a single week since the war began. On Tuesday October 6, only seven tankers crossed Hormuz, the lowest daily count since late July. The same day, the Panama-flagged tanker On Peace was hit about 9 nautical miles off the Omani town of Limah, which started a fire on board and injured 12 crew members, most of them Indian nationals.

The attacks are also spreading beyond the strait itself. On October 7, a tanker was hit by several projectiles around 51 nautical miles off Qatar, the first strike outside the Hormuz area since early September. Further incidents were reported east of Fujairah on October 8 and off Al Jazeera in the United Arab Emirates on October 9. On Saturday October 10, the UAE National Guard rescued 22 people after a tanker caught fire following a projectile strike, and on Sunday October 11 six commercial vessels were reported hit in and around the strait, the highest single-day total since the conflict started. New attacks in the strait were still being recorded on October 13 and 14, and Brent crude has stayed close to or above $100 a barrel through much of October.

The main casualty in the bunker market is Fujairah, the largest ship refuelling port in the Middle East, located on the UAE east coast just south of Hormuz. Many vessels now avoid calling there, and its suppliers depend on fuel cargoes that normally arrive from refineries on the other side of the strait. The price gap with Asia shows the strain. In mid-October, low-sulphur marine gasoil for November delivery was priced at roughly $1,713 per tonne in Fujairah, compared with about $1,286 per tonne in Singapore, a difference of more than $400 per tonne.

Singapore, the world's biggest bunkering hub, keeps growing as traffic shifts east. Port data released on October 15 shows that Singapore sold 41.97 million tonnes of conventional and biofuel bunkers in the first nine months of 2026, up 1.8% from the same period of 2025, which was itself a record year. High-sulphur fuel oil drove most of the increase, with sales up 10.4% to 17.58 million tonnes, lifting its share of the total to 41.9%. September sales alone reached 4.67 million tonnes, slightly below the level of a year earlier. Sales of biofuel blends fell by almost half over nine months, while LNG bunker sales rose by more than 21%.

Prices remain far above pre-war levels. On October 14, delivered very low sulphur fuel oil (VLSFO) cost about $917 per tonne in Singapore, while marine gasoil reached about $1,295 per tonne and high-sulphur fuel oil about $876 per tonne. Before the conflict began at the end of February, VLSFO in Singapore was trading around $525 per tonne. Forward prices point to a steep discount for later months, with Singapore VLSFO for January 2027 delivery around $743 per tonne, a sign that the market is paying a heavy premium for prompt supply.

The fragmentation is driven by rerouting. With hostilities near Hormuz and the Red Sea, many ships are forced onto longer voyages around Africa or diverted toward the Atlantic Basin, turning ports that were once secondary into new refuelling stops. Demand is rising in Mauritius, Southern and West Africa, Brazil, Sri Lanka and Pakistan. Bunker Holding, the world's largest marine fuel seller by volume, said during SIBCON that its 2026 sales should end slightly below last year at just under 24 million tonnes, as reduced traffic out of the Middle East and a more scattered market weigh on demand. The group noted that a large share of demand moved to Asia, that India is becoming a bigger bunkering hub, and that distillates have been tight in parts of Asia while fuel oil supply has been more stable. Its executives also stressed that Africa remains an expensive place to refuel, used out of necessity rather than choice.

Quality is the second major concern. Refuelling at less familiar ports can expose shipowners to smaller or less reputable suppliers, and differences in fuel sourcing, access to on-spec blending components and local testing services all add to the risk. Testing firm VPS told SIBCON delegates that bunker quality alerts have increased over the past year, a trend it linked to the rise in global conflicts. Around 95% of fuels tested are satisfactory on average, but results vary widely from one region to another. Bureau Veritas data for the second quarter of 2026 showed off-spec rates rising to 1.5% for VLSFO and 2.4% for high-sulphur fuel oil. Poor fuel can damage engines, cause breakdowns at sea and lead to costly disputes between owners, charterers and suppliers.

Singapore is responding by tightening its own rules. On October 14, the Maritime and Port Authority of Singapore and Enterprise Singapore launched a new national standard for bunker sampling and a common testing method to detect plastic contaminants in residual marine fuels, aiming to give buyers more confidence in the fuel delivered at the port.

Shipping companies are changing how they buy fuel. Stolt-Nielsen, which operates 167 chemical tankers, said it now secures fuel earlier and tracks availability and lead times at key ports, because the main risk is getting fuel on time as much as paying a high price for it. TFG Marine, a major fuel trader and supplier, said procurement has to be far more structured than before. Bunker traders are also positioning stocks in the newer hubs to make sure fuel is on hand when ships arrive.

The impact on the global supply chain is significant. Fuel is the largest running cost of a voyage, so higher bunker prices, longer routes and more frequent refuelling stops feed directly into freight rates for containers, bulk commodities and chemicals. Most Asia-Europe container sailings still go around the Cape of Good Hope, adding roughly 10 to 14 days to transit times and tying up a larger share of the global fleet. Middle East crude and product exports continue partly through a shuttle system in which tankers cross Hormuz with their tracking signals off and transfer cargoes to other ships in the Arabian Sea, which adds cost and delay. Gulf ports remain isolated for many carriers, and importers in Asia, Europe and Africa face higher landed costs and less predictable delivery dates.

Some carriers are testing a partial return to the Suez Canal, with Maersk and Hapag-Lloyd planning to route one Asia-Europe service through the canal from October 27, but most capacity remains on the longer route. The outlook for the ship fuel market now depends on security in the Gulf and the Red Sea, the ability of alternative ports in Asia, India and Africa to handle extra demand with reliable quality, and whether the record pace of tanker attacks seen in early October continues.