Hormuz crisis could speed up bunker fuel transition – IBIA chair
The Middle East crisis and closure of the Strait of Hormuz is likely to accelerate the bunker sector's shift towards alternative fuels, Adrian Tolson, chairman of the International Bunker Industry Association (IBIA) said.
MAP: Middle East including Red Sea and Strait of Hormuz. Getty Images
The Middle East crisis has exposed "structural" weaknesses in the global bunker fuel supply chain that will outlast the conflict itself, Tolson said.
Bunkering activity has continued with limited disruption on a global scale despite the Hormuz closure, Tolson noted.
Major bunkering hubs outside the immediate area of conflict, including Asia, have also maintained steady supplies despite early uncertainty, supported by diverted cargo flows to meet demand.
But this immediate stability masks deeper change, he warned.
Bunker prices continue to remain high and volatile, tracking the price movements in Brent and gasoil benchmarks.
"Suppliers have had to manage exceptional levels of price risk, while buyers are understandably questioning some of the pricing and margins seen during the initial stages of the disruption. In some cases, those increases are difficult to justify," he noted.
This volatility will lead bunker buyers to shift attention toward diversification within the fuel mix, with a focus on alternative fuels, Tolson said, adding that the Middle East conflict will drive both near-term disruption and longer-term shifts in supply and demand dynamics.
"This moment represents not only disruption, but a transition.”
By Konica Bhatt
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