Geopolitics

Hormuz closure tests bunker supply resilience
The closure of the Strait of Hormuz has turned the US-Iran war into a global energy, freight and bunkering shock. For marine fuel buyers and suppliers, the immediate concern has been price, but the wider issue is whether the industry’s supply chains, credit arrangements and risk-management systems are robust enough for a prolonged crisis.

A Global Chokepoint Under Pressure
The Strait of Hormuz has long been recognised as one of the world’s most important energy chokepoints. The International Energy Agency (IEA) says an average of 20 million barrels per day of crude oil and oil products moved through the Strait in 2025, representing around 25% of world seaborne oil trade. It also notes that 80% of those flows were destined for Asia, underlining the exposure of Asian economies and refining systems to any prolonged disruption.

The gas market is also exposed. The IEA says a closure would strand liquefied natural gas (LNG) exports from Qatar and the United Arab Emirates, which together account for almost 20% of global LNG exports. While Saudi Arabia and the UAE have some capacity to redirect crude away from Hormuz, other Gulf exporters remain heavily dependent on the route.

The economic effects are already visible. In its April 2026 Oil Market Report, the IEA said global oil demand was now expected to decline by 80 kb/d in 2026, compared with expected growth of 730 kb/d in the previous month’s report. It also estimated that demand fell by 800 kb/d year-on-year in March and by 2.3 mb/d in April, as higher prices and policy responses began to affect consumption.

The World Bank has described the conflict as a historic commodity-market shock. Its April 2026 Commodity Markets Outlook forecast a 24% rise in average energy prices this year and a 16% increase in overall commodity prices, with Brent expected to average $86/bbl in 2026. Its baseline assumes the most acute phase of disruption ends in May and that Hormuz traffic gradually returns close to pre-war levels by October, but it warned that risks remain tilted towards higher prices.

UN Trade and Development (UNCTAD) has taken a wider trade view, warning that higher energy, fertiliser and transport costs, including freight rates, bunker fuel prices and insurance premiums, may increase food costs and intensify cost-of-living pressures, particularly in vulnerable economies. ASEAN economic ministers have made a similar point, saying disruptions to Hormuz are increasing freight, insurance and logistics costs and could significantly slow regional growth.

From Oil Shock To Bunker Shock
For bunkering, the effect has been more complex than a simple pass-through from crude prices. Ship & Bunker reported that bunker prices rose sharply at all ports in March, with premiums to crude futures widening significantly after US and Israeli strikes on Iran and Iran’s closure of the Strait in response. By April, its G20-VLSFO Index averaged $890/mt, down 2.4% from March but still carrying a 16.3% premium to Brent, compared with 1.1% in the six months before the war.

Middle distillates have remained under particular pressure. Ship & Bunker said its G20-MGO Index gained 13.7% in April to average $1,606/mt, with the premium to Brent rising to 110%. The publication linked this to the importance of Middle Eastern refineries, and Asian refineries reliant on Middle Eastern crudes, in global distillate production.

There are signs that the first phase of panic buying and defensive pricing has eased. The Loadstar reported in mid-April that bunker shortage for containerships had not been as severe as initially feared, although prices remained high and local availability varied. It also quoted market participants in Singapore suggesting that ample stocks were available, even as some buyers questioned whether all price increases reflected genuine supply pressure.

That distinction matters. The crisis is not only a question of whether fuel exists, but where it is available, at what price, on what credit terms and with what operational certainty. Maersk said 20% of global fuel moves through Hormuz and introduced a temporary Emergency Bunker Surcharge from 25 March, saying the measure was needed to cover fuel availability, cost and mix outside its existing Fossil Fuel Fee. The surcharge applies globally, subject to regulatory approvals, and will be adjusted as fuel availability and cost change.

Hapag-Lloyd has also introduced an Emergency Fuel Surcharge for sailings from 23 March, with separate dry and reefer charges for long-haul and intra-regional trades. It has also applied war-risk charges for cargo linked to the Upper Gulf, Arabian Gulf and Persian Gulf. These measures show how bunker disruption is moving rapidly into freight contracts and customer-facing cost structures.