Fuel sales in Singapore, one of the busiest ports in the world, are rising as a result of the Red Sea shipping crisis, as per a Bloomberg report on Thursday.
According to data from the port authority, sales volumes increased by 12 per cent in January, compared to the same month last year. This is the second consecutive month of significant increases as the unrest in the Red Sea region causes ships to rush to refuel at the Asian hub.
“Demand in Singapore has increased as it’s almost the last stop before heading to the Indian Ocean,” Simon Neo, executive director of ship-refueling consultancy SDE International Pte stated. Additional ports like Fujairah in the United Arab Emirates and Sri Lanka might also be options for rerouted vessels, he added.
In recent months, the Houthi group has disrupted global maritime trade by targeting merchant vessels off their coasts as a protest against the unlawful Israeli war on Gaza. Currently, the death toll reached above 25,000 Palestinians, almost 70 per cent of whom are women and children.
The attacks on vessels resulted in an intervention from the U.S. and the U.K. Ship-owners thus choose the safer route around the Cape of Good Hope over the Suez Canal.
The lengthier trips and the decision by some ships to increase sailing speeds have increased bunker fuel consumption. This is causing them to refuel at less common locations like Durban and Walvis Bay as well as at important hubs like Singapore.
“Overall, demand for bunkering should increase due to the longer distances to be covered,” Fotios Katsoulas, lead analyst for tanker shipping and alternative fuels for S&P Global Commodity Insights. Estimates suggest
“This could add up to 5 per cent, if more ships avoid the Red Sea and some of them speed up to minimise the duration of the longer voyages,” he added.
The Maritime & Port Authority reports that total sales of marine fuel in Singapore increased to 4.9 million tons in January, a gain of roughly 12 per cent. They reached 5.1 million tons in December, which is a record monthly volume since 1995.
The most widely used grade of marine fuel, low-sulfur, saw prices soar to $671 per ton in January in Singapore, up roughly by 10 per cent from the end of the previous year, according to data from the marine fuel procurement and analytics platform Clearlynx. In contrast, Brent crude saw a 6 per cent increase that same month.
