Overview
- Bunker fuel, the heavy residue that powers most cargo ships, has been cut off by the Iran war’s Strait of Hormuz closure, lifting Singapore prices from about $500 per metric ton before the conflict to more than $800 by early May.
- Industry groups say the squeeze is costing global shipping roughly €340 million a day, and experts expect higher freight rates to pass through to consumer prices.
- Asia is bearing the brunt first because it relies more on Middle Eastern oil, with Singapore—the world’s largest refueling hub—reporting dwindling reserves as demand shifts there.
- Operators are cutting fuel use by slowing vessels and reshaping schedules, with average speeds for bulk and container ships down about 2% since the fighting began, according to Clarksons Research.
- Shipowners are ordering more dual-fuel vessels for flexibility, yet limited LNG bunkering and the higher cost of greener fuels cap how fast fleets can switch, while passengers in Singapore already face higher ferry fares and cruise surcharges.