11 September 2026
Executive Summary
The immediate shortage risk affecting global marine fuel has eased materially, providing an important change to the shipping-risk picture reported earlier this week.
Industry executives at the APPEC energy conference in Singapore said major bunkering hubs are currently able to source sufficient marine fuel despite continuing disruption caused by the Iran conflict.
This is a significant improvement from conditions earlier in the year, when the market experienced severe supply tightness.
Shipping companies and traders have adapted by finding alternative sources of fuel.
However, availability should not be confused with normality.
Very-low-sulphur fuel oil prices in Singapore remain more than 60% above pre-war levels.
Activity at Fujairah, one of the world’s most important bunkering hubs, also remains substantially below pre-conflict levels.
The position is therefore:
physical availability has improved, but the economic cost of marine fuel remains exceptionally elevated.
UK Impact
For UK importers and exporters, the improvement reduces the immediate risk of vessels being unable to obtain bunker fuel.
It does not remove exposure to:
- Bunker surcharges.
- Higher freight rates.
- Fuel-adjustment clauses.
- Longer voyage costs.
- Carrier repricing.
- Contract renegotiation.
Businesses should therefore distinguish between:
supply risk
and
price risk.
The first has improved.
The second remains substantial.
Global Impact
The development demonstrates the adaptability of global commodity markets.
When traditional fuel flows are disrupted, traders and shipping companies can often:
- Change sourcing hubs.
- Use alternative suppliers.
- Alter blending components.
- Reposition inventories.
- Change voyage refuelling plans.
That resilience reduces the probability of outright operational shutdown.
But adaptation carries a cost.
Alternative supply can involve:
- Longer transport distances.
- More expensive blending components.
- Additional financing.
- Higher storage costs.
- Greater working-capital requirements.
The global shipping system has therefore found ways around the shortage.
It has not restored pre-conflict economics.
Our View
Businesses should adjust risk planning to reflect this improvement without assuming the problem has disappeared.
Companies should ask:
- Are bunker surcharges still increasing?
- Which fuel index determines our freight costs?
- Can the carrier change surcharges immediately?
- Are fuel adjustments capped?
- Which bunkering hubs does the voyage rely upon?
- Could the vessel refuel elsewhere?
- Would alternative bunkering increase voyage time?
- Are freight contracts being renewed soon?
- Should longer-term rates be considered?
- Are shipping costs affecting product margins?
- Can fuel-related increases be passed to customers?
- Are suppliers using realistic freight assumptions?
- Are inventory decisions still based on an outdated expectation of fuel shortages?
Risk management also requires recognising when a risk improves.
Holding unnecessary emergency inventory or paying excessive premiums after availability normalises can itself destroy value.
The appropriate position today is therefore balanced:
marine fuel is available, but at a substantially higher structural cost.
Risk Indicator: ELEVATED – MARINE FUEL & SHIPPING COSTS
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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