Bunker Demand at Key Global Hubs up 1.8% in 2023

• Full-year volumes at the hubs gained 1.8% in 2023 vs 2022
• 0.4% average advance in Q4 2023 vs Q4 2022
• Q4 volumes see 4.4% gain from Q3
• Red Sea diversions start to bear fruit in bunker demand
• Read the full report here: shipandbunker.com/bi/bunker-volumes

Demand at key marine fuel hubs advanced on both a yearly and quarterly basis in the last three months of 2023, according to the latest market survey of bunker sales volumes in 17 leading global locations, leaving the year's total sales slightly above 2022's level.

As in previous quarters, Ship & Bunker and consultancy 2050 Marine Energy surveyed bunker market participants around the world alongside official data where available and found an average jump of 0.4% in volumes in the fourth quarter from the same period of 2022. The year-on-year advance compares with a 1.1% year-on-year decline in the third quarter of 2023. Q4 volumes sequentially were 4.4% higher than in Q3.

That left demand at the 17 hubs overall at 138.1 million mt last year, up by 1.8% on the year and the most since 2021. The figure amounts to about 61% of the global demand total shown by the most recent official IMO data.

The main drivers of demand in the fourth quarter were two canal disruptions -- the reduction in capacity through the Panama Canal, caused by drought, and the diversions away from the Suez Canal because of attacks off the coast of Yemen.

"Climate change and global geopolitics had their impact on shipping, providing a better-than-expected quarter for the NY and US Gulf ports, said 2050 Marine Energy's Adrian Tolson.

"While container activity was shrinking most of the year, reduced capacity in Panama and Suez rerouting helped to provide stronger bunker demand."

Africa Gains From Suez Diversions

In the immediate aftermath of the launch of Houthi attacks on commercial shipping in Q4, ports around Africa had the most to gain from ships avoiding the Red Sea and Suez Canal.

A local source told Ship & Bunker that Mauritius was seeing 'crazy demand' in December.

"The Suez situation shifted all the volumes to Africa in general, and Port Louis specifically has seen crazy demand from all the liners," the source said.

Global bunkering firm Monjasa said it had seen a boost in West African sales.

"We have been in further contact with many of the largest container lines who are already rerouting vessels around Cape of Good Hope and into the West Africa region," Monjasa's Simone Piredda told Ship & Bunker.

"Most lately, we are also seeing tankers and bulkers rerouting and expect to receive more demand from these segments too."

South Africa should have also been a key beneficiary, but the shutdown of supply at Algoa Bay since mid-September came at the worst possible time, depriving the country of a much-needed boost to demand.

Further afield, Singapore, Rotterdam and Gibraltar have also shown signs of taking advantage of the Red Sea situation.

The question hanging over the market now is whether avoiding the Suez Canal becomes a more permanent state of affairs, if the US and its allies cannot restore maritime security around Yemen in the near term.

"It's likely that Suez disruption will continue to create higher demand in Q1 as well," Tolson said.

Guido Cardullo, head of marine energy at Fratelli Cosulich, told Ship & Bunker his firm had seen firm gains in Singapore from the Red Sea situation.

"During Q4 2023 we registered a significant increase on the volume fixed at Singapore, and the trend is confirmed so far in 2024: statistics from the MPA indicate that bunker sales in January and February were around 15% higher than last year," Cardullo said.

"This is due to the crisis unfolding in the Red Sea, with vessel taking more fuel at Singapore to cover for the extra navigation days to reach Europe."

Methodology

As with the previous surveys the areas covered by the survey are Singapore, the Amsterdam-Rotterdam-Antwerp (ARA) hub, Fujairah, the US Gulf, South Korea, Russia, the Gibraltar Strait, Hong Kong, Panama, Zhoushan, Japan, New York, West Africa, South Africa, the Canary Islands, Los Angeles/Long Beach and Turkey. Data is sourced from a combination of market participants and official records.

The full breakdown of the survey results including sales volumes in each bunkering region for Q4 2023 and 2022 is available for subscribers by clicking here.