The Ship Fuel Crisis You Haven't Heard About — and Why It's About to Make Everything More Expensive

 

The Ship Fuel Crisis You Haven't Heard About — and Why It's About to Make Everything More Expensive

**There's less crude in the market. Refiners are prioritizing diesel and jet fuel. The result: ships are running short of fuel. And that could send the cost of everything you buy soaring.**

Let me tell you about a crisis that's been building quietly while the world's attention has been fixed on oil prices and gas stations.

You've probably noticed that gas is expensive. You might have even noticed that diesel hit record highs. But there's another fuel — one that most people never think about — that's about to cause serious problems for the global economy.

It's called bunker fuel. It's what powers the world's cargo ships. And there's a severe shortage looming .

Here's what's happening, why it matters, and what it means for your wallet.

## What Is Bunker Fuel and Why Should You Care?

Most ships and oil tankers run on heavy fuel oil, commonly known as bunker fuel. It's the heavy, dirty stuff that's left over after refineries produce gasoline, diesel, and jet fuel .

Think of it this way: when a refinery processes crude oil, it prioritizes the most profitable products — gasoline, diesel, and jet fuel. Bunker fuel is what's left at the bottom of the barrel . It's literally the bottom of the barrel, and it's what keeps the global economy moving.

About 90% of world trade moves by ship. When ships can't get fuel, they can't move cargo. And when cargo doesn't move, the cost of everything — from iPhones to bananas to cars — goes up.

## The Two Wars That Are Squeezing Supply

### The Iran War and the Strait of Hormuz

The US-Israel war on Iran has paralyzed key maritime trade routes, most notably the Strait of Hormuz . Before the war, about **20% of global oil and gas** passed through this narrow waterway . Now, traffic has collapsed.

Kpler data shows commodity vessel traffic through the Strait of Hormuz has averaged about **10 ships per day** over the past 10 days — the lowest level since May . Meanwhile, Middle East fuel oil exports were down **45%** year-over-year to an average of 447,000 barrels per day from March to August .

Kuwait's Al-Zour refinery, previously a major exporter of fuel oil, shipped only one 26,000-barrel-per-day cargo between March and early September, compared with exports of around 191,000 bpd in January and February . That's a **90% collapse**.

And it's not just the strait. Iran has hit multiple oil facilities in the Gulf in retaliation against the US . Yemen's Iran-aligned Houthis have attacked shipping in the Red Sea and around the Bab al-Mandeb Strait, another critical chokepoint . The International Energy Agency estimates that as much as a fifth of Middle East refining capacity — totaling some **9.6 million barrels daily** — has been knocked out by hostilities .

### The Ukraine War and Russian Refinery Attacks

Meanwhile, in Europe, the Russia-Ukraine war is making things worse. Ukrainian drone attacks have hit multiple major Russian refineries . Russia is the world's second-largest exporter of crude oil, and its refinery output has been severely disrupted .

Russian fuel oil exports in August hit a record low of **591,000 barrels per day**, down from an average of over 860,000 bpd in 2025 . Russia also imposed a ban on diesel exports, adding to the tightness in refined product markets .

The net result? Less crude is being shipped out from key oil-producing regions, especially the Gulf and Russia . And oil companies aren't prioritizing fuel oil as their product of choice.

## The Refiner's Dilemma: Diesel Is More Profitable

Here's the catch that's making this crisis worse. Refiners have a choice about what they produce from each barrel of crude. And right now, they're choosing to make more diesel, gasoline, and jet fuel — because that's where the money is .

"Record-low gasoline and diesel inventories will incentivize refiners globally to maximize secondary unit runs with more fuel oil feedstock barrels," Energy Aspects analyst Royston Huan told Reuters .

In plain English: refineries are burning more fuel oil as feedstock to make diesel and gasoline, which means there's even less fuel oil left over for ships.

Nigeria's massive 650,000-barrel-per-day Dangote refinery is a perfect example. It has ramped up diesel, petrol, and jet fuel exports, while its fuel oil exports have dropped .

## The Numbers That Should Scare You

Let's look at the hard data.

**Energy Aspects forecasts a fuel oil supply deficit of 218,000 barrels per day in the third quarter of 2026** . That's the first quarterly shortfall estimated by the consultancy since the third quarter of 2025, when the deficit was just 6,000 bpd .

Here's what that means in real terms:

**Fuel oil stocks at three of the world's biggest bunkering hubs — Singapore, the Amsterdam-Rotterdam-Antwerp hub, and Fujairah — are around 30% below their three-year seasonal averages** .

And the price reflects the pressure. In Singapore, the world's largest bunkering hub, very low sulphur fuel oil (VLSFO) — the main shipping fuel — was priced at just under **$825 per metric ton on September 1**, up **76%** since the Iran conflict began . That's about $130 a barrel.

Brent crude rose about 40% over the same period. Marine fuel prices have increased **substantially faster** than the underlying crude benchmark .

In Singapore, suppliers were quoting VLSFO lead times of around **9 to 16 days** in early September as reduced supplier availability and shortages of blending components constrained prompt supply . That means ships can't just show up and fill up — they have to wait, sometimes for more than two weeks.

## What This Means for Asia — and the World

Asia will be hit hardest by this shortage . Why? Because Asia is most reliant on Gulf oil flows that have been disrupted by the Iran war .

Singapore, the world's largest bunkering hub, imports more than half of its nearly 1 million barrels a day of demand . When Middle Eastern fuel oil exports fall 45%, Singapore feels it immediately.

But this isn't just an Asian problem. The global shipping industry is interconnected. When ships can't refuel in Singapore, they may have to take longer routes to find fuel, which increases demand and prices everywhere else.

## Why This Matters for Your Wallet

Higher bunker fuel costs will feed directly into shipping rates . And when shipping rates go up, the cost of everything goes up.

Think about every product you buy that arrives on a cargo ship. That's just about everything. Electronics, clothing, food, cars, furniture, toys — all of it moves by sea.

When shipping costs rise, those costs get passed on to you. Importers don't absorb the cost; they raise prices. And then retailers raise prices. And then you pay more.

We've already seen this pattern play out with diesel. U.S. diesel prices hit record highs on Friday as renewed US-Iran hostilities and Ukrainian attacks on Russian refineries increased supply disruptions . Now, bunker fuel is going the same way.

## What Comes Next

The situation is likely to get worse before it gets better. Rystad Energy analyst Valerie Panopio told Reuters: "Due to the protracted supply disruption in the Middle East, we expect fuel oil supply to remain critically tight in the third quarter" .

The International Energy Agency estimates that as much as a fifth of Middle East refining capacity has been knocked out by hostilities . That's not going to be fixed overnight.

And there's no end in sight for the wars driving this crisis. The Iran conflict shows no signs of cooling, and Ukrainian drone attacks on Russian refineries have intensified, not eased .

## The Bottom Line

The ship fuel shortage is a crisis that's been building quietly while the world focused on gasoline prices and oil markets. But it's about to become much more visible.

When ships can't get fuel, global trade slows. When global trade slows, supply chains tighten. When supply chains tighten, prices go up.

A 218,000-barrel-per-day deficit might not sound like much in a global market that consumes about 100 million barrels a day. But when that deficit is concentrated in a specific product — bunker fuel — and when stocks at key hubs are 30% below normal, the impact is magnified.

Singapore fuel oil prices are up 76% since the war started. Lead times have stretched to 16 days. Middle East exports have collapsed by nearly half. Russian exports have hit record lows.

This isn't a minor supply hiccup. It's a structural shift in the global energy market, driven by two wars, damaged refineries, and a shipping industry that's running on fumes.

The next time you buy something imported, remember: there's a good chance its journey was powered by fuel that's getting harder and harder to find.

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## Frequently Asked Questions (FAQs)

### 1. What exactly is bunker fuel?

Bunker fuel is the heavy fuel oil used to power cargo ships and oil tankers. It's a byproduct of the crude oil refining process, leftover after refineries produce more profitable products like gasoline, diesel, and jet fuel .

### 2. Why is there a shortage of ship fuel?

Two wars are driving the shortage. The Iran war has effectively closed the Strait of Hormuz, through which about 20% of global oil and gas passed before the war , cutting Middle East fuel oil exports by 45% . The Ukraine war has damaged Russian refineries, with Russian fuel oil exports hitting a record low of 591,000 bpd .

### 3. How bad is the shortage?

Energy Aspects forecasts a fuel oil supply deficit of 218,000 barrels per day in the third quarter of 2026 . That's the first quarterly shortfall since 2025, when the deficit was just 6,000 bpd .

### 4. What does this mean for shipping costs?

Higher bunker fuel costs will push up shipping rates . Ships sailing longer routes to avoid conflict zones also increase demand for fuel .

### 5. How much have bunker fuel prices increased?

In Singapore, the world's largest bunkering hub, very low sulphur fuel oil prices have risen 76% since the Iran war started, to just under $825 per metric ton . That's $130 a barrel — much faster than the 40% rise in Brent crude over the same period .

### 6. Which region will be hit hardest?

Asia will be hit hardest because it relies most on Gulf oil flows that have been disrupted by the Iran war . Singapore imports more than half of its nearly 1 million barrels a day of demand .

### 7. How does this affect the average consumer?

Higher shipping costs get passed on to consumers in the form of higher prices for imported goods. Everything from electronics to clothing to food will become more expensive as shipping costs rise.

### 8. Is there any relief in sight?

Probably not in the short term. Rystad Energy expects fuel oil supply to remain "critically tight" in the third quarter . The wars driving the crisis show no signs of ending, and Middle East refinery damage will take time to repair .

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. The views expressed are based on publicly available information as of September 2026. Energy markets, geopolitical situations, and supply conditions are subject to rapid change. The author does not endorse any specific investment strategies or products. Past performance is not indicative of future results. Before making any financial or investment decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation.*