Singapore bunker demand remains under pressure as geopolitical tensions from the US-Iran conflict and competitive pricing at regional ports like Zhoushan force shipowners to reduce fuel intake. While May saw a marginal recovery from April’s 14-month low, year-on-year volumes for conventional fuels—including VLSFO, HSFO, and LSMGO—all recorded declines, according to data from traders and shipping brokers.
Why is Singapore losing bunker market share?
Shipowners are increasingly diverting vessels to ports like Zhoushan, China, to capitalize on lower fuel costs, according to local traders. The regional shift is compounded by the US-Iran conflict, which has disrupted traditional trade routes and reduced the volume of fuel supplies flowing through the Strait of Hormuz. These logistical bottlenecks have limited bunkering opportunities for larger vessels, such as Very Large Crude Carriers (VLCCs), forcing many charterers to adopt a “just-in-time” procurement strategy, buying only the minimum fuel required for their immediate voyages.
How are alternative marine fuels performing?
The transition to green shipping in Singapore faces a complex reality, as total alternative marine fuel volumes dropped by 23% in May compared to the previous year. Biofuels, in particular, saw a sharp contraction, with demand plunging 57% to 60,800 tonnes, according to market data. The decline was largely driven by a 62% drop in VLSFO-biofuel blend consumption, which fell to its lowest point in over two years.
Conversely, LNG is bucking the downward trend. LNG bunker sales hit a record 70,300 tonnes in May, a 56% increase from the previous year. This growth is supported by an expanding order book for dual-fuelled vessels. Industry data indicates that B100 (pure biofuel) usage also hit a record high of 12,800 tonnes, as shipowners pivot toward higher-concentration fuels to meet stricter decarbonization compliance requirements amid rising conventional fuel prices.
Comparison: Conventional vs. Alternative Fuel Trends
| Fuel Type | May Performance |
|---|---|
| VLSFO | Down 6.5% (YoY) |
| Biofuel Blends | Down 62% (YoY) |
| LNG | Up 56% (YoY) |
Frequently Asked Questions
Why did biofuel demand fall in Singapore?
Biofuel demand fell primarily due to the higher cost of blended fuels and a shift in charterer preference toward minimal bunker quantities, according to traders. Many owners opted for B100 or conventional fuels instead of traditional B24/B30 blends.
Is Singapore losing its status as a top bunkering hub?
While spot demand has been slow, Singapore remains a vital hub. Vessel arrivals actually rose by over 3% year-on-year in May, totaling 11,729 arrivals, which provided a buffer against the decline in per-vessel consumption.
What is driving the record demand for LNG?
The surge in LNG bunkering is driven by the delivery of new dual-fuelled vessels and the long-term commitment of key shipowners to transition away from heavy fuel oils to meet environmental regulations.
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