by The global bunker fuel market consists of various fuel grades that are used to power marine vessels. Fuel oils used in shipping, such as heavy fuel oil and marine gas oil, provide the energy needed for vessel propulsion and auxiliary systems. The demand for shipping services has increased significantly over the past few decades, driven by growing global trade and outsourcing of manufacturing activities. Approximately 80-90% of global trade is transported by sea and international seaborne trade is expected to continue on its strong growth trajectory over the coming years. This growth in maritime trade volumes has led to increased demand for quality bunker fuels that comply with stringent emission norms.
The global bunker fuel market is estimated to be valued at US$ 130 billion in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
As environmental protection becomes a priority, shipping industry players are investing in cleaner fuel alternatives to reduce emission from bunker fuels. The International Maritime Organization’s new regulation stipulates lowering sulfur content in bunker fuels to 0.5% from January 1, 2020 from the earlier limit of 3.5%. To comply with the new mandate, ship owners are increasingly opting for cleaner but more expensive alternative fuels such as liquefied natural gas instead of conventional heavy fuel oil. The growth of LNG as a marine fuel is a prominent key trend in the global bunker fuel market over the forecast period. The utilization of LNG can significantly reduce air pollutants such as sulfur oxide, particulate matter and nitrogen oxide emissions from shipping.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the bunker fuel market is moderate. Requirement of large capital investments in storage facilities and distribution infrastructure pose entry barriers for new players.
Bargaining power of buyers: The bargaining power of buyers in the bunker fuel market is high. The availability of alternatives such as LNG fuel compels existing players to offer competitive pricing and differentiated products.
Bargaining power of suppliers: The bargaining power of suppliers is moderate due to the availability of multiple crude oil suppliers globally. However, fluctuations in crude oil prices remain a challenge.
Threat of new substitutes: The threat of substitutes such as LNG fuel is moderate as it requires investment in gas engines by ship owners. However, stricter sulfur cap norms are expected to increase demand for environment-friendly substitutes.
Competitive rivalry: The bunker fuel market witnesses high competition due to the presence of major established players.
Key Takeaways
The Global Bunker Fuel Market Demand is expected to witness high growth over the forecast period. The global bunker fuel market is estimated to be valued at US$ 130 billion in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023-2030.
Regional analysis: Asia Pacific dominates the global bunker fuel market currently and is expected to maintain its dominance during the forecast period. China, India, and Japan are the fastest growing markets in the region majorly driving the demand. Stringent sulfur emission norms and growing maritime trade are fueling the bunker fuel consumption.
Key players: Key players operating in the bunker fuel market are ExxonMobil, Shell, China Marine Bunker, BP, Bunker Holding and etc. Shell is one of the largest supplier with strong global footprint and diversified product portfolio. BP is expanding its LNG bunkering facilities globally to strengthen its position.
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