Bunker Fuel Market Size and Share: A Comprehensive Overview
Despite the challenges posed by the global COVID-19 pandemic, the shipping, logistics, and supply chain industries are displaying remarkable resilience, with strong signs of recovery in the world’s trade scenes. While the scars of the pandemic continue to influence the trade landscape, there is a notable shift in the demand for bunker fuel. Recent developments in the liquefied natural gas (LNG) trade are gaining prominence, as LNG-based vessels become the preferred choice for trade purposes, and LNG infrastructure expands rapidly. These developments are expected to significantly boost the growth prospects of the global bunker fuel market in the forecast period.
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Bunker Fuel Sales Surge with a Growing Global Fleet
Data from UNCTADstat indicates substantial growth in the global commercial fleet, with an increase of approximately 81 million deadweight tons (dwt) from January 2019 to January 2020. This growth, particularly in bulk carriers, has been remarkable. The Baltic and International Maritime Council (BIMCO) has projected a more than 6% growth rate for the world fleet by the end of 2026, with LNG tankers gaining prominence. As of 2020, the global fleet comprised approximately 90,000 vessels, with around 60% of them operating on international routes. These vessels, along with recreational ones such as yachts and boats, contribute significantly to bunker fuel consumption.
New Opportunities Emerge as Marine Trade Adopts Low-Sulfur Alternatives
The International Maritime Organization’s (IMO) 0.50% global sulfur cap, implemented in January 2020, is driving the shift away from high-sulfur fuel oil (HFO) toward cleaner fuels. This transition is benefiting low-sulfur fuel oil, LNG, and other low-sulfur fuel choices, opening up new opportunities in the bunker fuel market. Besides HFO, other key bunker fuel types such as intermediate fuel oil 180 (IFO 180) and intermediate fuel oil 380 (IFO 380) are also expected to lose market share to emerging low-sulfur fuel alternatives. Additional prominent fuel types include marine gasoil (MGO), marine diesel oil (MDO), and marine fuel oil (MFO).
Rising Hydrogen Resource Development Boosts Bunker Oil Demand
Increasing activities in the hydrogen resource development segment are bolstering the demand for bunkers in crude oil and product tankers, further stimulating the bunker oil market’s growth. However, market uncertainties, stress, and pricing conflicts, including the ongoing US-China trade war and geopolitical tensions between China and India, remain challenges.
Quality Concerns Continue to Pose Challenges
Despite the post-COVID-19 recovery in the oil and gas sector, bunker fuel quality issues persist, particularly with high-sulfur fuel oil (HSFO), low-sulfur fuel oil (LSFO), and very low-sulfur fuel oil (VLSFO). These quality issues, along with concerns about bunker fuel compatibility and stability, remain pressing challenges for industry participants, especially shipping companies. The exploration of multiple blending components, including biofuels, may exacerbate these quality issues.
To address these challenges, shipowners are increasingly subjecting bunker oil to regular quality testing to maintain homogeneity and stability. Regional authorities are also stepping up efforts to address these issues. Smaller ports, lacking stringent regulatory enforcement, face greater challenges related to bunker fuel quality.
Asia Pacific Dominates the Global Market
Asia Pacific continues to dominate the global bunker fuel market, with strong contributions from countries such as China, Singapore, Japan, India, and Australia. China, in particular, is rapidly becoming a key player in the marine fuels industry, with an annual valuation exceeding US$100 billion. China’s growing maritime trade and refining capacities position it to reshape the global marine fuel industry and become a leading hub for marine fuels. Singapore remains an essential bunker fuel market in the region, while Australia’s status as one of the largest LNG exporters drives marine trade and fuels the bunker fuel market.
Partnerships and Acquisitions Drive Competition
Prominent players in the global bunker fuel market, including Exxon Mobil Corporation, BP p.l.c., and Royal Dutch Shell PLC, are pursuing business expansion and strategic partnerships to remain competitive. Acquisitions are also a favored strategy for market players. Recent examples include Lukoil Marine Bunker Ltd.’s acquisition of two bunkering tankers and Koole Terminals’ bunker fuel production agreement with Maersk Oil Trading.
Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2023-2030 – By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa) https://www.fairfieldmarketresearch.com/report/bunker-fuel-market
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