April 20, 2024

Bunker Fuel Market Growth Accelerated by Increasing Demand from Shipping Industry

The bunker fuel market consists of various heavy fuel oil grades that are used to power ship engines. Bunker fuels play a vital role in lubricating engines, generating power and propelling ships across seas. With nearly 90% of global trade being transported by ships, there is immense demand for bunker fuels from the shipping industry.

The global bunker fuel market is estimated to be valued at US$ 150 billion in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
According to World Trade Organization, the volume of goods transported by sea is expected to double by 2040. As major shipping companies look to expand their fleet sizes, global demand for bunker fuel is poised to rise substantially over the coming years. Furthermore, International Maritime Organization’s mandate on reducing sulfur content in bunker fuel from January 2020 is prompting shipping companies and fuel suppliers to increase their investments in very low sulfur fuel oil (VLSFO) and liquefied natural gas (LNG). The shifting focus towards cleaner burning marine fuels compliant with emerging emission regulations will further accelerate the demand for bunker fuels like VLSFO and LNG in the foreseeable future.

Segment Analysis
The global bunker fuel market is dominated by heavy fuel oil as it accounts for more than half of the total bunker fuel demand. Heavy fuel oil is preferred for cargo shipping vessels owing to its density and viscosity, which increases the range of ships. Moreover, heavy fuel oil provides better engine efficiency and thermal efficiency as compared to other fuel grades like marine gas oil and marine diesel oil.

Key Takeaways
The global bunker fuel market is expected to witness high growth over the forecast period of 2024 to 2031.

Regional analysis: Europe dominated the global bunker fuel market in 2021 and is expected to maintain its leading position throughout the forecast period. This can be attributed to strong presence of trading hubs like Rotterdam and Antwerp in the region. Also, many of the world’s largest shipping companies are based in Europe, which drives the demand for bunker fuel.

Key players: Key players operating in the bunker fuel market are Royal Dutch Shell Plc, ExxonMobil Corporation, BP Plc., Chevron Corporation, and TotalEnergies. Shell is the largest bunker fuel supplier with presence across all major bunkering hubs. The company supplies various grades of fuel including IFO 380, IFO 180, MGO/MDO to meet diverse needs of its customers. ExxonMobil is another major player and operates an extensive network of terminals and supply infrastructures globally to serve customers.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it