Singapore bunker sales rise amid Red Sea crisis

Sales of marine bunker fuel at Singapore climbed 8.5% in the first half of 2024, official data showed on July 15, as shipping disruptions in the Red Sea boosted global bunkering demand, though demand slowed month-on-month in June.

In the first half of 2024, Singapore, the world’s largest vessel bunker hub, saw total bunker sales of 27.2 million metric tons, up from 25.1 million tons the previous year. Conventional fuel sales, including residual fuel oils and marine gasoils, reached 26.7 million tons, marking a 7.5% increase year-over-year. This growth was partly driven by disruptions in the Red Sea, leading vessels to refuel more frequently at key hubs like Singapore.

The demand for alternative fuels also surged, with sales of marine biofuel blends reaching 288,000 tons, up nearly 49% from the previous year. This trend is fueled by efforts among shipowners to adopt cleaner alternatives to comply with emissions regulations, including the EU emissions trading system.

To remind, in 2023, Singapore saw significant growth in bunker sales, totaling 51.82 million tonnes, which surpassed the previous record set in 2017. This underscores Singapore’s role as a leading bunkering hub supporting the global shipping industry. The sales included 520,000 tonnes of biofuel blends, a remarkable increase from 140,000 tonnes in 2022, highlighting a strong shift towards alternative fuels.

On the container shipping front, Singapore handled 20.25 million 20-foot equivalent units (TEUs) in the first half of the year, a 6.4% increase from the same period last year. However, severe congestion at key ports globally, including Singapore, led to logistical bottlenecks, causing some vessels to divert to other regional ports such as China’s Zhoushan, which offered lower fuel prices in June. This diversion impacted Singapore’s bunker sales, which decreased by 11.4% from May to June.

Since the beginning of 2024, PSA Singapore (PSA) has been intensifying its efforts to bolster operational capacity and alleviate the impacts of global supply chain disruptions. This initiative includes enhancing frontline capabilities, commissioning new berths at Tuas Port, and reactivating berths and yard space at Keppel Terminal.

Despite challenges like congestion and price competition, Singapore remains a crucial hub for global maritime trade, continuing to play a pivotal role in both conventional and alternative fuel markets.