Bunker fuel, also known as heavy fuel oil or HFO, is a type of fuel oil used aboard vessels. It is typically used in ship engines and jet turbine marine engines. Bunker fuels provide engines with a high energy density and are relatively inexpensive compared to other marine fuels such as marine gas oil and marine diesel oil. They offer advantages including cost effectiveness and availability at major ports around the world.
The global bunker fuel market is estimated to be valued at US$ 140 Billion in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Increased demand from the shipping industry is one of the key trends accelerating the growth of the bunker fuel market. Around 90% of global trade is transported by sea and the total international seaborne trade has been consistently rising over the past few decades. The growth of international trade and expansion of shipping fleets to support the growing trade volumes have significantly driven the demand for bunker fuels from ship owners and operators. While stricter emission regulations pose a challenge, increasing acceptance of cleaner and lower sulfur fuels in the shipping industry is expected to open up new opportunities for compliant bunker fuels in the coming years.
Segment Analysis
The global bunker fuel market is dominated by high sulfur fuel oil (HSFO) segment. HSFO accounted for over 60% of the total bunker fuel demand in 2021 owing to its widespread usage by ocean-going vessels and availability across major ports. However, the share of HSFO is expected to decline significantly as the International Maritime Organization's (IMO) regulations will prohibit the use of fuels containing above 0.5% sulfur content starting January 1, 2023. The low sulfur fuel oil (LSFO) segment is likely to witness strong growth during the forecast period due to growing compliance towards emission regulations.
Key Takeaways
The Global Bunker Fuel Market Demand is estimated to be valued at US$ 140 Billion in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023 to 2030.
The Asia Pacific region currently accounts for over 50% of the global bunker fuel consumption. Strong trade activity, rising seaborne trade, and presence of key bunkering hubs such as Singapore and Shanghai have aided the growth of the bunker fuel market in Asia Pacific. China, Japan, and South Korea are some of the major consumers of bunker fuels in the region. The region is expected to continue its dominance during the forecast period supported by increasing maritime trade. The European region currently accounts for over 30% of the global bunker fuel demand. Major ports in Northern Europe including Rotterdam, Antwerp, and Hamburg are among the busiest bunkering hubs globally handling a large refueling volume. Stringent emission norms in the region have pushed ship operators to switch to low sulfur compliant fuels ahead of the IMO 2020 deadline. Additionally, the availability of advanced refineries capable of producing distillates have complemented the transition towards cleaner marine fuels in Europe. Going forward, compliance with emission standards is expected to support the consumption of low sulfur fuels in the region.
Key players operating in the bunker fuel market are Royal Dutch Shell Plc., ExxonMobil Corporation, BP Plc., Chevron Corporation, and TOTAL SA. Shell is the largest supplier of marine fuels globally with a strong presence across major ports. The company offers a wide range of marine fuels including conventional HFO and distillates to support changing energy and regulatory needs. ExxonMobilis another leading player with refining and marketing capabilities spread across several countries to serve the global bunker fuel demand.
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