Ship Fuel Shortage Hits Global Shipping Industry Amid Ongoing Wars
The global shipping industry is facing a new challenge due to the ongoing wars in West Asia and Europe. The US-Israel war on Iran has paralyzed key maritime trade routes, including the Strait of Hormuz, through which about 20 percent of global oil and gas passed before the start of the war.
According to Energy Aspects, Middle East fuel oil exports were down by 45 percent year-on-year from March to August, with an average of 447,000 barrels per day (bpd) compared to 650,000 bpd in the same period last year.
The shortage is not only due to the war on Iran but also due to Russia's ongoing war on Ukraine. Ukrainian drone attacks have affected Russia's refinery output, with its fuel oil exports in August hitting a record low of 591,000 bpd, down from an average of over 860,000 bpd in 2025.
Royston Huan, a senior oil products analyst at Energy Aspects, said that since April, the company has noticed a 400,000 bpd reduction in ship fuel sales compared to levels a year ago. This is equivalent to an average of two million tonnes of fuel oil less every month.
The shortage of ship fuel could drive up global freight costs, which would affect consumers and manufacturers of goods and commodities. The price of VLSFO in Singapore has risen by 76 percent since the war on Iran began to just less than $825 per metric tonne, or $130 a barrel, as of September 1.
The shortage is not only affecting shipping but also the global economy. Hamad Hussain, a climate and commodities economist at Capital Economics, said that the lack of fuel oil supply is putting significant upward pressure on prices, which could contribute to higher shipping costs.