Bunker Fuel Market Overview
The major trend witnessed in the global bunker fuel market is the shift toward cleaner and environment-friendly fuels used in bunkers. Owing to the rising need to tackle the environmental pollution caused by conventional fuels used in ship bunkers, various companies producing these fuels are investing on the research and development of cleaner fuels. This has clearly indicated the growing preference of shipping companies for eco-friendly fuels for operational activities.
Bunker fuel is utilized by shipping corporations for fueling their marine fleet. Distillate fuel and residual fuel are the two types of fuels commonly used in bunkers. Of the two, residual fuel dominates the bunker fuel market, with around three-fourths of the share.
Based on fuel grades, the bunker fuel market can be categorized into marine gas oil/marine diesel oil (MGO/MDO), intermediate fuel oil (IFO) 380, IFO 500, low sulfur (LS) 380, IFO 180, LS 180, and IFO 700. Of these, IFO 380 is the most preferred fuel grade owing to its cheapest cost. The market for IFO 380 is expected to grow at a significant rate in the coming years because most of the ship engines are capable of combusting this fuel.
On the basis of seller, the bunker fuel market can be categorized into oil producers, large independent distributors, and small independent distributors. Large independent distributors held a significant share in the bunker fuel industry during the historical period. These distributors have multiple physical assets, such as blending facilities and storage terminals in major bunkering ports. This gives them a competitive advantage over small independent distributors.
The end users of bunker fuel comprise tanker vessels, container vessels, and bulk and general cargo vessels. Bulk and general cargo vessels held the largest share in the bunker fuel market during the historical period, owing to the fact that the majority of the transportation of goods is carried out through bulk and general cargo vessels.
Based on region, the bunker fuel market can be classified into Europe, North America, Asia-Pacific (APAC), Latin America, and the Middle East and Africa. Among all the regions, APAC held the largest share in the market during the historical period, owing to the presence of major shipping companies in the region, particularly in China, India, South Korea, and Japan. Moreover, increased exports from APAC to the European and North American countries are resulting in the high demand for shipping vessels, which, in turn, is positively impacting the growth of the bunker fuel industry.
Bunker Fuel Market Dynamics
The major driver identified in the bunker fuel market is the expanding fleet size of shipping vessels. Owing to the rapid industrialization and commercialization in developing countries such as China, India, Vietnam, and the Philippines, exports as well as imports in these countries have risen significantly. To facilitate the movement of goods across various nations, the demand for shipping vessels is increasing considerably. The rising number of shipping vessels, in turn, is resulting in the increased consumption of fuels used in ship bunkers.
Other factors driving the market are the rapid increase in the bunker requirement for the storage of fuel and the increasing hydrocarbon resource development activities in offshore areas. With the rise in the demand for crude oil in emerging economies, the demand for tankers shipping crude oil has also increased. Thus, the increase in the number of these vessels continues to directly contribute to the bunker fuel market growth.
The key factor hindering the growth of the bunker fuel market is the fuel reduction initiatives by the shipping community. In a bid to comply with international environment protection standards and reduce the carbon footprint caused by moving vessels, shipping companies are adopting efficient technologies that help reduce the fuel consumption. The declining fuel consumption as a result of the introduction of fuel-efficient vessels is likely to restrain the market growth in the coming years.
With increasing oil and gas exploration activities, the bunker fuel market is expected to grow exponentially in emerging oil-producing regions, particularly in the Indo-Pacific region. New oil-producing regions have vast unexplored reserves, which are sufficient to meet the growing energy demand. Exploration of these untapped reserves will positively affect the demand for shipping vessels, which, in turn, will boost the growth of the market growth.
Bunker Fuel Market Competitive Landscape
The bunker fuel market is consolidated in nature, as the capital investment required to produce the fuel is huge. Hence, the market has a limited number of big players operating within. Some of the key players in the global bunker fuel industry are Gazpromneft Marine Bunker LLC, Aegean Marine Petroleum Network Inc., Lukoil-Bunker LLC, ExxonMobil Corporation, and Chemoil Energy Limited.
The study provides the historical as well the forecast market size data for various countries, including the U.S., Canada, France, Germany, the U.K., Italy, Spain, Japan, China, India, Brazil, Saudi Arabia, and South Africa.