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Sales of marine fuel at top global refuelling ports are slowing at the start of this year as the shipping sector grapples with uncertainty over geopolitics and the impact of escalating tariffs on global trade, industry sources said.
Marine fuel sales at the world's respective No.1 and No.3 refuelling hubs, Singapore and Fujairah in the United Arab Emirates, totalled 9.78 million metric tons (62.09 million barrels) in the first two months of 2025, down 9 per cent from the same period a year ago, official data showed.
In February, Singapore's sales of marine fuel hit a 20-month low while vessels calling at the world's busiest port also dropped sharply to a two-year low.
Fujairah's sales slumped to a record low in February. No.2 refuelling centre Rotterdam will post bunker sales data at the end of the quarter, and European traders said demand is also slowing.
"There has been a bit of a slowdown in demand as economic activity is lagging. Freight rates are lower as a result as well," a European trader said.
The shipping sector handles 80 per cent of world trade, which has been rattled as US President Donald Trump imposes or threatens to implement tariffs on key trading partners, triggering retaliation.
"Shipping companies are now optimising their operations more cautiously to navigate volatile tariff conditions and geopolitical instability," said Christian Roeloffs, CEO of container trading and leasing platform Container xChange.
"The slowdown in marine fuel demand is a reflection of the broader uncertainty in global trade."
Declining bunker trade comes after global sales jumped in 2024 following attacks on Red Sea shipping by Yemen's Houthis that prompted most operators to divert vessels around southern Africa.
Singapore fuel purchase enquiries in January and February dropped by at least 20 per cent from the same period last year, estimates from several bunker suppliers showed.
Spot premiums of delivered 0.5 per cent low-sulphur bunker fuel at Singapore are hovering around $10 per ton after falling to $5-$10 in late February, the lowest in at least a year, data from industry sources showed.
"We are unsure where demand has vanished to," said a bunker trader in Asia. "Typically if Singapore demand is slow, we might see an uptick in demand from other ports (in the region) but that's not happening."
The sources declined to be named as they were not authorised to speak to media.
Demand at key refuelling ports in Northeast Asia has also been lukewarm, with suppliers at Zhoushan, a hub in eastern China, cutting prices to at least $5 a ton below Singapore's levels since mid-January to attract demand, sources said.
In Europe, trade sources said bunker demand at the key ports of Amsterdam-Rotterdam-Antwerp (ARA) has also slowed ahead of the Mediterranean ECA (Emission Control Area) regulation, which takes effect from May and requires ships operating to use fuel oil with sulphur content capped at 0.1 per cent, down from 0.5 per cent.
"Big container shipping companies do not want to order too much VLSFO (Very Low Sulphur Fuel Oil) to get stuck with it when ECA starts in May," a fuel broker said. -Reuters