Singapore Bunker Fuel Prices Double as Iran War Disrupts Shipping and Suppliers Ration Sales

Fuel stocks remain available, but ships face rationed sales

Singapore's very-low sulphur fuel oil prices have more than doubled since February 27, while marine gasoil has surged 160 percent as war in the Middle East disrupts shipping and makes suppliers reluctant to commit to new purchases. By March 17, 2026, distributors in the world's largest bunkering hub were rationing stock, trimming sales and canceling some orders even as the Maritime and Port Authority of Singapore said supplies remained adequate.

Very-low sulphur fuel oil, commonly called VLSFO, has exceeded $1,000 per metric ton in Singapore. Spot market premiums, the extra amount charged above fuel oil cargo quotations, have reached record levels well above $200 per metric ton. Crude oil benchmarks have risen about 40 percent over the same period, far less than the increases in the marine fuels ships need to keep moving.

Several distributors directly involved in the trade, speaking anonymously because they lacked authorization to speak to the media, said they had halted purchases of large volumes since the previous week. Rapid price changes have made them wary of agreeing to buy fuel that could become much more expensive before a transaction is completed.

Distributors are giving preferred customers priority and reducing or canceling other sales to preserve existing stock. Some are also taking advantage of the unusually high premiums available for immediate sales. The result is a market in which wholesale supplies remain relatively comfortable by historical standards, yet individual shipowners can struggle to secure fuel at an acceptable price.

Bunkering means supplying fuel to a ship. Singapore's problem is therefore both a price shock and a purchasing problem: having fuel in storage and having a supplier willing to sell the required grade, quantity and delivery slot are different parts of the same transaction.

Hormuz traffic collapses as insurance disappears

The Strait of Hormuz is at the center of the disruption. The narrow waterway connects the Persian Gulf to the Arabian Sea and normally carries roughly 20 percent of global crude oil and fuel shipments. Since Israel and the United States launched strikes against Iran on February 28, ship traffic through the strait has fallen 97 percent, according to the United Nations Conference on Trade and Development.

Arne Lohmann Rasmussen, chief analyst at Global Risk Management, described how the threat of attack and the difficulty of obtaining insurance have stopped vessels from making the passage.

It is de facto closed in that no one dares to go through. You can be attacked, and you can't get insurance or it is extremely expensive, so you have to wait until the security situation is better.

Major marine insurers Gard, Skuld, NorthStandard, the London P&I Club and the American Club canceled war risk coverage for vessels operating in Iranian waters, the Gulf and adjacent waters, effective March 5. War risk coverage protects against losses associated with conflict. Its withdrawal has left more than 150 vessels, including oil tankers and tankers carrying liquefied natural gas, stranded around the strait.

The cost of hiring a supertanker to carry oil from the Middle East to China has nearly doubled to a record exceeding $400,000 per voyage, according to London Stock Exchange Group data. Shipowners face a combination of physical danger, insurance costs and much higher transport charges.

The disruption developed quickly across several dates:

• February 27: The starting point for the reported doubling of Singapore's marine fuel prices.
• February 28: Israel and the United States launched strikes against Iran, after which traffic through Hormuz collapsed.
• March 5: Major marine insurers' cancellations of war risk coverage took effect.
• March 7: A congestion measure at Shanghai and Ningbo had risen to 1.4 from 1.0 before the conflict.
• March 11: Singapore's weekly figures showed higher residual fuel stocks, while middle distillate inventories were at their lowest since November 2022.

Singapore's inventories tell two different stories

Singapore normally handles large volumes of fuel oil and marine gasoil for resale to vessels calling for refueling. Extensive storage on land and at sea, together with a broad network of suppliers, makes the port more resilient than smaller bunkering hubs.

The effective closure of Hormuz has nevertheless interrupted flows from major Middle Eastern producers, including the UAE, Iran, Iraq, Kuwait and Saudi Arabia. Diversity of supply helps Singapore absorb disruption, but the loss of important routes still changes what traders can buy and how much they must pay.

The Maritime and Port Authority of Singapore, known as MPA, said it was monitoring developments closely. In an email response, the authority described the supply position:

Singapore's bunker supply comes from several sources. At present, there is adequate supply to meet demand.

Government figures showed residual fuel stockpiles rising in the week to March 11 and remaining above the seasonal average for the previous five years. Residual fuels are the heavier oils used in parts of the marine fuel market.

Middle distillate inventories, which include jet fuel and gasoil, had fallen to their lowest level since November 2022. Singapore jet fuel prices have doubled since the war began, putting immediate pressure on aviation costs. The figures help explain why a comfortable stock position for heavier fuel can exist alongside tighter conditions for other products.

Fujairah's alternative route also faces disruption

Fujairah, the UAE port outside the Strait of Hormuz, has also been hit. Its position makes it an important alternative hub, and it is the terminus of the Abu Dhabi Crude Oil Pipeline. Recent drone attacks on petroleum facilities caused fires and temporary suspensions of oil loading.

Shipowners have become hesitant to call at Fujairah despite its location outside the strait. Disruption there reduces the usefulness of a port that would otherwise provide an alternative to routes through Hormuz. Vessels looking elsewhere for fuel can add demand at other hubs, including Singapore.

Fuel prices at Fujairah are moving differently by grade. High-sulphur fuel oil weakened by 3.09 percent, while VLSFO rose 8.44 percent. The contrasting movements reflect the particular supply disruptions affecting different fuels, rather than a uniform increase across every product.

Five minutes to accept a fuel offer

Most sellers have moved away from term contracts toward spot offers to capture rising premiums. A term contract covers purchases under an agreement extending over time; a spot offer is a purchase at the price available for an immediate transaction. That shift exposes buyers more directly to rapidly changing market prices.

Traders said suppliers were demanding decisions within five minutes of presenting cargo options. Previously, buyers could typically have up to an hour. A shorter window leaves ship operators less time to compare prices, confirm delivery arrangements and decide whether an offer fits their schedule.

A trader based in China, speaking anonymously, described the practical effect on vessels trying to obtain fuel in Singapore:

Some ships are unable to be refuelled at the Singapore port due to soaring oil prices supported by the Iran war.

General Index data recorded a 9.07 percent increase in VLSFO and a 9.17 percent increase in intermediate fuel oil, known as IFO380. These figures describe additional market movements alongside the much larger price increases recorded since late February.

Singapore's VLSFO price above $1,000 per metric ton compares with $755 in Rotterdam. The European port's supply through the Amsterdam-Rotterdam-Antwerp hub has remained largely shielded from the Middle East disruption. Using those prices, Singapore's fuel costs at least $245 more per metric ton, before considering how individual transactions are priced.

Other Asian ports restrict sales and extend waits

Zhoushan, China's largest bunker port, is also seeing slower offers. Suppliers reduced the pace of offers after Beijing requested that companies suspend new contracts for refined fuel exports. Vietnam has reportedly stopped selling bunkers entirely to conserve fuel for domestic consumption.

Physical suppliers across Asia are urging vessel operators to book bunker stems, the fuel deliveries ordered for individual ships, well before their delivery dates. Recommended lead times have stretched to 10 to 15 days for standard grades and 12 to 22 days for low-sulphur marine gasoil, or LSMGO.

Singapore suppliers said roughly half of the usual LSMGO providers were unable to offer the grade. That limits the number of sellers a vessel can approach, even when other fuel products remain available in the port.

Longer waits, fewer offers and fast decisions create a difficult planning cycle. Ship operators must arrange fuel earlier, while suppliers want buyers to accept prices almost immediately. A vessel's schedule can therefore be affected before it encounters a crowded terminal or a disrupted shipping route.

Congestion spreads through connected ports

Shanghai and Ningbo's queue-to-berth ratio rose to 1.4 by March 7 from 1.0 before the conflict, according to maritime analytics firm Linerlytica. The ratio compares vessels waiting with those at berths, helping show how much pressure a port is facing. The increase from 1.0 to 1.4 represents a 40 percent rise in the measure.

Singapore's ratio remained steady at approximately 0.6. Industry warnings focused on the possibility that traffic diverted from Fujairah and delayed Middle East cargoes could quickly put more pressure on its capacity.

Vessels originally bound for Middle Eastern ports are unloading at alternative transshipment centers, including Singapore, Colombo and Salalah. Transshipment means moving cargo from one ship to another for the next stage of its journey. More diverted cargo increases terminal use and can slow the handling of containers and other shipments.

Gene Seroka, executive director of the Port of Los Angeles, said bunker fuel prices had effectively doubled since hostilities began. Shipping lines pass those increases to cargo owners within 30 days, connecting the fuel market shock to the costs paid by businesses transporting goods.

Ron Widdows, a shipping veteran who previously led major ocean carriers, warned that disruptions spread quickly through interconnected shipping networks. A delay at one port can affect the same vessel's later calls, while a diverted cargo creates extra work at the port receiving it. The coming weeks will determine how widely those pressures extend through global supply chains.

Airfares and household costs come under pressure

Singapore's dependence on trade exposes it to higher costs beyond marine fuel. Household electricity tariffs, which are closely tied to international gas prices, are expected to reverse recent declines. Gasoline prices at the pump have already responded to the volatility.

Qantas announced international airfare increases of approximately 5 percent, citing jet fuel costs that rose "up to 150 percent over the past fortnight." More than 43,000 flights have been canceled globally since the crisis began, according to aviation analyst Cirium.

Dean Long of the Australian Travel Industry Association warned that the full effect on flight prices would develop over three to six months as airlines exhaust their fuel hedging strategies. Hedging arrangements help airlines manage exposure to changing fuel prices, so the timing of higher costs reaching passengers can vary.

Food aid takes longer and costs more to deliver

The World Food Programme is facing diverted shipping services, extra surcharges and congestion far from the Middle East. Higher transport costs stretch the resources available for moving food, while longer routes delay its arrival.

Jean-Martin Bauer, director of the WFP's food and nutrition analysis service, described the disruption as "nothing less than another seminal moment in global supply chain history." He explained how rerouting was affecting the agency's operations:

We're needing to go the long way around the Cape of Good Hope to reach some of our key geographies. We're seeing congestion in Asia. It's quite a severe disruption that's taking place right now.

WFP operations to Sudan, the agency's largest mission, now face approximately 25 additional days of shipping time. That represents a 50 percent extension of the supply chain, making an already lengthy journey longer for food intended for people in need.

The UN has warned that higher energy, fertilizer and transport costs may worsen food insecurity among vulnerable populations already struggling with debt distress and limited government finances. Fertilizer costs affect food production, while fuel and shipping charges affect the expense of moving food to markets and delivering assistance.

As of March 17, Singapore's authorities maintained that bunker supplies were adequate, but distributors were restricting sales and some vessels were struggling to refuel. No date was given for normal traffic through Hormuz or normal purchasing conditions to resume. The pressure already stretches from fuel orders in Singapore to airline tickets, cargo charges and food deliveries to Sudan.

The Essentials

• Singapore VLSFO prices have more than doubled since February 27 and exceeded $1,000 per metric ton; marine gasoil has risen 160 percent.
• Crude oil benchmarks rose about 40 percent over the same period, while Singapore spot fuel premiums reached record levels well above $200 per metric ton.
• Traffic through the Strait of Hormuz fell 97 percent after the February 28 strikes against Iran.
• Major marine insurers canceled war risk coverage effective March 5, leaving more than 150 vessels stranded around the strait.
• MPA said Singapore had adequate bunker supply, but distributors were prioritizing preferred customers and reducing or canceling other sales.
• Residual fuel stocks were above their seasonal average in the week to March 11, while middle distillate inventories were at their lowest since November 2022.
• Recommended fuel delivery lead times reached 10 to 15 days for standard grades and 12 to 22 days for LSMGO.
• Higher fuel costs are reaching cargo owners and airline passengers, while WFP shipments to Sudan face approximately 25 extra days at sea.