Singapore's Bunker Market Squeezed as Middle East Conflict Continues
The ongoing conflict in the Middle East has been affecting Singapore's bunker market for over six months, since US and Israeli strikes on Iran began on February 28. The cost of refuelling a ship in Singapore has become a sharp indicator of how far the conflict has spread beyond the Gulf, surpassing oil price fluctuations.
According to data from Ship & Bunker, the price of Singapore's very low sulphur fuel oil (VLSFO) stood at approximately US$825 per tonne on September 1. This is a 76% increase since the start of the war, compared to a 40% rise for Brent crude.
The tightening of fuel-oil supply, rather than just higher crude prices, is driving this gap. Refiners are prioritising diesel and jet fuel over marine fuel due to strong demand for these products, leading to a shortage in fuel oil for ships. Middle East fuel-oil exports have also decreased significantly during the conflict.
Energy consultancy Energy Aspects forecasts a global fuel-oil deficit of around 218,000 barrels per day in the third quarter of 2026, compared with a marginal 6,000 bpd shortfall in the same quarter of 2025.