Fuel oil supplies remain tight as disruptions around the Strait of Hormuz and attacks on Russian refineries reduce exports. Vitol is also expanding its bunkering operations and preparing to deliver LNG in Singapore.
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The global supply of fuel oil remains constrained amid renewed tensions around the Strait of Hormuz and attacks on Russian refineries. The global fuel oil supply shortage has pushed HSFO premiums higher, while demand for bunker fuel remains strong.
According to Reuters, shipments of HSFO through the Strait of Hormuz, including those from Iran, have fallen by about 800,000 metric tonnes per month compared with February. The effects of disruptions around the Strait of Hormuz on oil prices are becoming increasingly apparent as exports decline and shipping costs rise. Exports through the route averaged about 3.7 million tonnes per month between January 2025 and February 2026.
Attacks on Russian refineries have also contributed to the supply shortage, reducing fuel oil availability by an estimated 1 million tonnes per month. The spot premium for 380-centistoke HSFO reached nearly $50 per tonne this week, compared with $5.10 on February 27, according to LSEG data.
According to Gallagher, producers are now paying higher freight rates and risk premiums to ship their cargoes through the Strait of Hormuz. Further attacks on shipping and oil facilities could put additional supplies at risk.
Moreover, some refiners in North Asia have begun using HSFO as an alternative to crude oil in their upgrading units following disruptions to Saudi Arabian crude oil shipments through the Red Sea. The low-sulphur fuel oil market faces less pressure owing to increased exports from China and Nigeria’s Dangote refinery.
Vitol has been expanding its fuel oil bunkering business worldwide in response to supply disruptions. The trader began bunkering operations at Gwadar Port in Pakistan in July, offering an alternative to Fujairah in the UAE.
Vitol is also expected to start LNG bunkering operations in Singapore in the coming weeks. The company expects to receive one LNG bunker vessel in November and two more next year. In the first nine months of 2026, Singapore recorded 487,100 tonnes of LNG bunker fuel sales, up more than 21% from the previous year, according to the Maritime and Port Authority of Singapore. Business Honor observes that fuel oil supply disruptions are raising costs for refiners and shipping operators, encouraging companies to explore alternative bunkering locations and cleaner fuel options.
FAQs
Why are global fuel oil supplies tightening?
Disruptions around the Strait of Hormuz and attacks on Russian refineries have reduced fuel oil exports, tightening supplies in the global market.
What is high-sulphur fuel oil (HSFO)?
HSFO is a type of residual fuel oil with a relatively high sulphur content, used in some marine engines and industrial applications.
How have fuel oil premiums changed?
Spot premiums for 380-centistoke HSFO were close to $50 per tonne during the reported week, compared with $5.10 on February 27.
Why are North Asian refiners buying more HSFO?
Some refiners are using fuel oil instead of crude oil in upgrading units following disruptions to Saudi crude exports through the Red Sea.
What is Vitol planning in Singapore?
Vitol expects to begin LNG deliveries for bunkering in Singapore in the coming weeks and expects to receive three LNG bunker vessels across November and next year.
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