Fuel Demand Surge Due to Longer Maritime Routes After Red Sea Incidents

In a recent analysis dated June 5, 2024, it was reported that sales of bunker fuel in Singapore, the world’s largest bunkering fuel port, have reached all-time highs. This surge in sales is believed to be a result of increased global consumption, with cargo ships, tankers, and other marine vessels opting for longer routes to avoid the Red Sea due to ongoing attacks by Yemen-based Houthi militia since November 2023.

The alternative routes chosen by ship operators often involve navigating around Africa’s Cape of Good Hope, adding significant mileage and travel time compared to the traditional Red Sea route. As a consequence, the number of cargo and tanker ships transiting the Suez Canal at the northern end of the Red Sea has decreased by more than half compared to the previous year.

Data from the Maritime and Port Authority of Singapore indicate a continuous year-over-year increase in bunker fuel sales since December 2023, reaching a historic high in December of that year. This trend underscores Singapore’s position as the leading port for bunkering fuel sales globally. Future updates will include an analysis of changes in global chokepoints in the upcoming World Oil Transit Chokepoints report by the International Energy Agency.

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