Rising Monthly Fuel Consumption Linked to Red Sea Diversions

During Petrospot’s Maritime Week Americas, Tolson discussed the impact of the Red Sea shipping crisis on demand and the unique logistical challenges created for the shipping industry. He highlighted how the Suez crisis alone has increased fuel consumption for diverted ships by 1 million metric tonnes per month in 2024, leading to altered bunker buying patterns. Despite the challenges, Tolson noted that these situations make the bunker value chain profitable for its participants.

Tolson also addressed the current types of fuel used by ships, noting that HSFO demand has increased since the implementation of IMO 2020, driven by container vessels with scrubbers. However, he emphasized that HSFO is not likely to play a significant role in the future. While alternative fuels like biofuels and LNG are limited in major ports, hydrogen, methanol, and ammonia are favored for new shipbuilding orders. These fuels are expected to be available in significant quantities in North America, thanks to government incentives and infrastructure assistance.

Looking ahead, Tolson raised concerns about LNG as a long-term decarbonization solution due to life cycle GHG challenges. He highlighted biofuels as a short-term way for ships to reduce their GHG footprint, but noted the lack of government incentives in most Americas bunker markets. He suggested that the Inflation Reduction Act (2022) in the US could provide a significant regional advantage for alternative fuels like hydrogen, methanol, and ammonia, making them more readily available in North America compared to other global locations.

Source .