Disruptions to the global oil supply caused by the 2026 Iran War has affected bunkering operations at Singapore – the world’s largest bunkering port – with several players unsure of mid-term avails and prices, found an industry survey conducted by Manifold Times.

The bunkering publication spoke to C-suite members of the local marine fuels supply chain including traders, suppliers, and shipowners to understand the complex operational challenges of their respective businesses in such a volatile climate.

INDUSTRY OBSERVER – The Overall Situation

“Singapore bunker availability is unlikely to be badly affected by the current Iran conflict in the short term because we do have reserves,” stated a Singapore bunker veteran.

“Our bunker cargo flows not only from the Middle East, but also from Europe, South America, Africa and the Indian subcontinent. If the war goes on, bunker cargo players will simply have to adjust their trade flows to include these options.

“In general, the disruption now is related to bunker buyers and sellers hesitating to commit to a position due to the immense volatility of current oil prices.”

PRICING COMMENTARY – By Argus Media

Singapore bunker market hit by extreme volatility as prices surge to record highs

Conventional bunker prices in Singapore were upended in late February and early March by extreme volatility, tightening supply and signs of demand destruction, with markets severely disrupted over a compressed timeframe of around two weeks.

Across all major grades, prices surged to multi‑year or record highs. The most liquid VLSFO 0.5pc sulphur grade touched a record high of $1,191.23/t delivered on board (dob) Singapore on 9 March, up 131pc from $515.52/t assessed by Argus on 27 February.

VLSFO, the highest‑volume bunker fuel traded in Singapore, has come under growing supply pressure as Middle East conflict-related disruptions curtailed cargo flows from the region and other origins. A sharply backwardated market structure emerged, with March–April laycan spreads widening to as much as $40/t, as shipowners scrambled for prompt volumes amid large day‑to‑day price swings.

High‑sulphur fuel oil (HSFO) prices in Singapore also climbed to record territory, reaching $1,072.60/t on 9 March, up 152pc from the 27 February close.

The most dramatic rally, however, was seen in marine gasoil (MGO). Argus assessed Singapore MGO prices at $1,923.33/t dob, a 180pc increase from around $690/t on 27 February, reflecting acute tightness in distillate availability and strong compliance-driven demand.

Looking ahead, the key risk for Singapore remains the stability of supply availability, as bunker prices remain highly sensitive to underlying market fundamentals. Securing prompt volumes when vessels call at port is expected to be the most critical challenge for bunker suppliers, shipowners and traders in the days ahead.

BUNKER TRADERS – Challenging Commercial Environment

“The market premium between crude and bunker products has dramatically increased in the past three weeks. The mixed information about the situation within the Strait of Hormuz and US-Isreal-Iran war keeps affecting crude’s movement erratically,” shared a source at ElbOil Singapore.

“We are seeing customers being conservative towards bunker purchasing. Suppliers are not challenging with paper trading at further dates due to unforeseen cargo avails.

“Some markets already started having difficulty with bunker avails. For the Singapore bunker market, we are still having enough reserve for current stage; some neighbouring countries are now seeking support from Singapore, which will tighten up Singapore avails.

“Russian oil may become a life-saving remedy for the Southeast Asian market if the war doesn’t end soon. Will the sanctions issue continue affecting the usage of Russian oil?

“As bunker trader, we are seeing lesser enquiries due to some ship operators choosing to adopt a wait-and-sit approach by not taking up new voyages. Shipowners might suffer from the high bunker cost with ship crews not willing to take risk by sailing to the warzone.

“2026 might be a year to change the world order and exacerbate the already depressed economic environment.”

The Global Bunker Sales Manager of another trading company offered more detail into how bunker price volatility has affected operations.

“The current issue is the commercial trading environment. The uncertain price movement, specifically on price drops, has resulted in us worrying on customer performance when they have previously stemmed the order on a higher price,” he shared.

“Recently in China some suppliers have also started charging a USD 200 per metric tonne (pmt) fee plus market difference for cancellation to protect themselves in the event of a market collapse in case buyers pull out from the order.

“Being in the trading environment, we understand Singapore bunker suppliers have to offer a high price for marine fuel because they are buying the products at a high cost from cargo players.

“Right now, bunker availability issues are common at international ports West of Singapore. Supplies of marine fuel at Singapore port are still fine without tightness at least for March, but April is another story.”

A Chief Operating Officer of a Singapore bunker trading firm highlighted the lack of sufficient credit to continue trades due to increased premiums.

“We faced two issues since beginning of the war. Firstly, the dramatically increased premium and limited availability from floaters have resulted in bunker prices shooting up. A 5,000 metric tonne (mt) parcel of High Sulphur Fuel Oil (HSFO) which cost around USD 2.5 million before the war is now valued at between USD 3.5 to 4 million. This has caused us to purchase lesser oil due to limited credit from bunker suppliers,” he explained.

“Secondly, bunker availability for April remains uncertain. Even though we have fixed laycan for April, the cargo players cannot guarantee loading. Those who have oil now are king.

“The above daily scenario has resulted in us hesitating to quote basis on delivered as Brent could be USD 110 in the day but USD 100 at night. At this point, we have planned to clear cargo and wait for the market to stabilise.”

BUNKER SUPPLIERS – Caught in the Middle

A source at a Singapore physical bunker supplier shared his company experienced order cancellations from traders and shipowners due to previous panic buying during the early onset of the war.

“Everybody panicked and bought an excessive volume of bunkers between 2 March to 6 March and paid whatever premium commanded during that time but today the premium is not as high as before,” he said.

“Some buyers who earlier bought at higher premiums for deliveries at further dates have now regretted their decision and recently cancelled orders to buy from other sources/suppliers for a lower premium; some have chosen to go through the legal route to recuperate losses.

“This development has caused damage and losses to the supplier. The volatility on flat price and bunker premiums has eroded suppliers’ confidence to secure more cargo for the forward month [in April] for fear that this tension would just stop overnight and we will be stuck with cargoes at high premiums and unable to sell unless we take a very heavy loss.”

The situation has led to another bunker supplier taking a conservative approach towards business.

“Generally, we are not taking a lot of position, and we fix bunker stems to cargoes which we already have on hand to limit our exposure,” noted the Director.

“We do not see any supply difficulty short term, but the real unknown is that there is no real guarantee the situation will get better as the war continues. The issue lies if cargo players can secure and commit volume to their bunker supplier clients.”

A Director of another local bunker supply firm shared his company has fulfilled all bunker contracts to date.

“Supply for my side is good for the short to mid term and there is not much congestion as far as concerned as we had made brilliant calls for cargo sourcing,” he said.

The Manager of a bunker supplier who offers alternative marine fuels, meanwhile, reported on a sudden spike in enquiries for green products during this volatile period.

“Singapore, being an oil trading hub, will unlikely have issues with cargo availability. However, we have received increased enquires for grey methanol and B100 biofuel,” he shared.

“The price of gas oil is now around USD 2,000 pmt whereas B100 is USD 1,300 pmt. However, the issue is we were unable to supply due to lack of availability.

“Instead of relying of fossil-based marine fuels which price is heavily driven by politics and war, alternative bunker fuels now seem to be a good idea as it allows shipowners to diversify and mitigate their risk portfolio.”

SHIPOWNERS – Weathering the Storm

The Global Bunker Procurement Director of a box shipping firm outlined his challenges for ensuring his fleet remains operational. The bull whip effect on the marine fuel due to the Middle East crisis is significant.

“The biggest challenge is buying bunkers in the Middle East area and related areas such as India, Sri Lanka, and South Africa. We understand the whole market is very worried about the situation and we are seeing a few scenarios taking place,” he stated.

“Some shipowners started panic buying to secure more fuel than usual; it’s not wrong as you will not know the market direction in the next few months. Instead of buying bunkers for a round voyage, some may buy up to two round voyages to ensure continuity for the next 1 to 2 months.

“The backwardation is very steep for the next few months. We are hearing some importers hesitant to import cargoes for next 1 to 2 months. As the import price now is on the high side, they do not want to be in a situation to sell their bunker cargoes when it become lower.”

“With the exception of buying bunkers at the Middle East and related countries, we have not encountered any issue in terms of quality or volume at Singapore port where we work very closely with partners.”

“Premiums were very very high during the beginning of the war but recently completely collapsed. Just yesterday [24 March], the premium for HSFO was flat while LSFO was USD 30,” stated the Director of a bulk shipping firm.

“However, we see the attitude from some suppliers who are taking advantage of this market. We will not continue to deal with these suppliers who have not performed or misuse the situation.

“Overall, I am very positive on the whole bunker supply situation around Singapore. There are completely no problems at China for securing avails. Our bunker purchasing contracts have been locked till June for all deliveries.”

Photo credit: Argus Media
Published: 26 March 2026