Alkagesta says reduced terminal capacity and stricter sulfur emission rules are reshaping Malta's bunker fuel mix. File Image / Pixabay

Malta's bunker market is undergoing a rapid shift towards distillate marine fuels after reduced terminal capacity and stricter sulfur regulations weighed on fuel oil demand, according to Alkagesta Market Insights.

The company said on Monday that fuel oil volumes fell by around 35% year on year between January and May, dropping from about 382,000 mt in 2025 to 247,000 mt in 2026.

Over the same period, demand for DMA marine gasoil moved in the opposite direction, rising from around 150,000 mt in the first four months of 2025 to 247,000 mt in the corresponding period this year.

Alkagesta said the trend reflects both the introduction of the Mediterranean Emission Control Area (ECA) and temporary disruptions to heavy fuel availability caused by reduced terminal capacity across the island.

The Mediterranean ECA, which entered into force on May 1, 2025, has significantly altered bunker fuel demand across the region.

Citing fuel testing agency VPS data, Alkagesta said VLSFO volumes across the Mediterranean's ten largest bunkering ports fell by 23% during the first six months after the regulation took effect, while marine gasoil volumes more than doubled and ULSFO demand quadrupled.

Valletta recorded an even sharper shift.

VLSFO volumes fell 57% to 47,732 mt from 111,641 mt, while marine gasoil volumes more than tripled to 103,445 mt. ULSFO volumes also climbed to 34,535 mt from 2,821 mt over the same period.

Alkagesta said the combination of ECA requirements, FuelEU Maritime and the EU ETS is encouraging shipowners to switch to compliant fuels at each port call.

The company expects marine gasoil and ULSFO to continue gaining market share as environmental rules tighten, while demand for VLSFO and HSFO is likely to become increasingly concentrated among specific buyers and trades.

“Geography gives Malta an advantage, but long-term competitiveness will depend on reliability, governance and the ability to adapt to the energy transition," Darren Axisa, Country Manager Malta of Alkagesta, said.

The full analysis from Alkagesta can be found here.