Maersk Shifts Bunker Supply as Strait of Hormuz Closure Sparks Physical Fuel Imbalance

The crisis in the Strait of Hormuz has triggered a severe physical imbalance in the global bunker fuel market, moving far beyond a simple price spike. The core of the problem is a sudden, massive disruption to the flow of oil and products, creating a mismatch between where fuel is needed and where it can be supplied.

The price signal is stark. The average cost of very low sulphur fuel oil (VLSFO) across the world's top bunkering hubs has surged to $960 per tonne. That figure is nearly double pre-crisis levels and represents the highest price since the early days of the Ukraine war. High sulphur fuel oil prices have followed a similar trajectory, hitting $794 per tonne and even an all-time high of $886 per tonne earlier in the week. This isn't just a market reaction; it's a direct reflection of a physical chokepoint.

The scale of the disruption is quantifiable. Analysis indicates that about 1,100 vessels are currently trapped to the west of the strait. This includes a significant portion of the global tanker fleet, as well as container and bulk carriers. The strait is a critical artery, with nearly two-fifths of crude oil trade and a substantial share of oil products and LNG shipments passing through it. When that artery closes, the flow of fuel to key consumption hubs is severed.

This is where the imbalance becomes clear. While executives acknowledge that there is enough oil in the world, the crisis has created a severe distribution problem. As Maersk's chief commercial officer stated, "There is currently sufficient fuel globally, but it is unevenly distributed". This unevenness is creating tangible refueling challenges at key ports. The company has already begun shifting its own bunker supply across its global network to ensure vessels can refuel where needed, a move that signals the operational reality of the shortage. The situation is a classic case of a physical imbalance: ample global supply, but a critical failure in the logistics network to deliver it to the right place at the right time.

Supplier Responses and Operational Realities

The market's price signals are clear, but the real story is in how suppliers and shippers are adapting to the physical constraints. Their responses reveal the practical limits of managing a crisis where supply is globally sufficient but physically stranded.

Maersk is taking direct action to secure its own operations. The company is redistributing its bunker supply across its global network to ensure its vessels can refuel where needed. This proactive shift is a critical step for a firm that consumed over 10 million tonnes of bunker fuel last year. By moving fuel to potential chokepoints, Maersk is attempting to safeguard its operational stability and protect the flow of trade. It's a classic corporate response to a distribution problem: using internal logistics to mitigate external disruption.

Yet, for the broader industry, the primary adaptation is forced rerouting. Major carriers like Maersk and MSC are rerouting around Africa's Cape of Good Hope to avoid the danger zone. This detour adds a severe operational cost, extending Asia-Europe voyage times by 10 to 14 days and boosting fuel consumption by nearly 40%. This isn't a minor adjustment; it's a fundamental shift in the global trade map that increases the demand for bunker fuel at every port along the new, longer route, further straining an already tight supply chain.

The financial pressure of this new reality is captured in the explosion of charter rates. The average rate for a Very Large Crude Carrier (VLCC) has surged to around $185,000 a day, a figure five times the long-term average. This spike reflects the extreme scarcity of tankers capable and willing to navigate the dangerous waters, as well as the massive increase in the distance and fuel required for these new routes. The underlying physical constraint is clear: the strait's closure has not only cut off a major trade artery but has also created a parallel, high-cost market for the vessels needed to transport fuel around the continent.

The bottom line is that these responses highlight the limits of corporate agility. Maersk's internal redistribution helps one giant, but it does nothing to solve the systemic rerouting problem. The industry is paying a steep price in time, fuel, and capital to work around a physical chokepoint. Until the strait reopens, these operational realities will continue to amplify the bunker fuel shortage, keeping prices elevated and trade flows strained.

The Path to Resolution: Catalysts and Risks

The path out of this bunker fuel crisis hinges on a single, unresolved variable: the reopening of the Strait of Hormuz. There are currently no indications that this will happen soon. In fact, the situation has hardened, with Iran's new supreme leader calling for the strait to "remain closed". This absence of a near-term catalyst means the physical imbalance will persist, keeping prices elevated and operational costs high for the foreseeable future.

The primary risk now is that sustained high bunker prices force a structural change in the shipping fleet. The current price of $960 per tonne for VLSFO is a massive burden, especially for older, less efficient vessels that consume more fuel per voyage. As fuel costs become a dominant line item, the economic pressure to retire these ships will intensify. This could accelerate the scrapping cycle, potentially removing tonnage from the market at a time when demand for shipping services is already being distorted by rerouting. The result would be a fleet that is both younger and smaller, which could tighten supply in the long run, even after the strait reopens.

A key watchpoint is whether the extreme financial pressure leads to increased vessel idling or further fleet redeployment. The container sector currently shows little sign of idling, with commercial inactivity at just 0.6% of the global fleet. However, the combination of high charter rates and high bunker costs creates a precarious balance. If the cost of operating a vessel on a rerouted, longer route exceeds the revenue it can generate, owners may choose to idle it rather than burn through cash. This would be a direct signal that the crisis is pushing the industry into a defensive posture, reducing effective supply and potentially amplifying freight rates further.

The broader market dynamics are now in a state of forced adaptation. The industry is paying a steep price in time and fuel to reroute around Africa, a move that increases demand for bunker fuel at every port along the new path. This creates a self-reinforcing loop: the crisis causes more fuel consumption, which keeps prices high, which in turn pressures the most vulnerable ships. For now, the market is absorbing these costs, but the ceiling for that resilience is unknown. The resolution remains entirely dependent on geopolitical developments in the Middle East, with no practical alternative supply chain capable of compensating for the loss of the Hormuz corridor.