by The Bunker Fuel Market is estimated to be valued at US$ 28.84 Bn or Mn in 2023 and is expected to exhibit a CAGR of 7.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Bunker fuel, also known as marine fuel oil or ship’s fuel, is a type of fuel oil used aboard ships. It is typically composed of residual fuels derived from crude oil refining and boil within a range of 100–370°C. The key products in bunker fuel market are residual fuel oil, distillate fuel oil, and others. Residual fuel oil also known as marine diesel oil (MDO) is commonly used as bunker fuel, while distillate fuel oil represents low-sulfur alternatives. Bunker fuel is used to power ship engines and generators onboard.
Market Dynamics:
Population growth and industrialization have increased maritime trade over the past few decades, boosting the demand for bunker fuels from the shipping industry. The international seaborne trade volume is expected to reach 11 billion tons by 2023 which is further projected to drive the bunker fuel consumption. Furthermore, strict environmental regulations have pushed ship owners to use cleaner fuels with lower sulfur content such as low-sulfur fuel oil and liquefied natural gas. The International Maritime Organization’s implementation of a 0.5% global sulfur cap on marine fuels effective from January 2020 is a key driver as it has increased demand for compliant low-sulfur marine fuels. However, the fluctuating crude oil prices can hamper the stability of bunker fuel prices in turn affecting the industry’s profit margins. Nonetheless, widespread acceptance of biofuels as an alternative bunker fuel is anticipated to unlock new opportunities in the coming years.
Segment Analysis
The global bunker fuel market is segmented into fuel types and end-users. Based on fuel types the market is segmented into Residual fuel oil and Distillate fuel oil. Among these, the residual fuel oil segment accounts for the largest market share owing to high carbon content which makes it cheaper as compared to distillate fuel oil. It is commonly used fuel type accounting for more than 70% of share.
PEST Analysis
Political: Stringent regulations regarding emission control from bunker fuel by IMO are expected to impact the demand. IMO has set a global limit on the sulfur content of fuel oil and aims to reduce greenhouse gas emissions from ships.
Economic: Fluctuations in crude oil prices impacts the pricing of bunker fuels. Also, changes in global trade patterns and seaborne trade volumes have a significant influence on the demand for bunker fuels.
Social: Increasing awareness regarding reducing emission and adoption of cleaner fuels are expected to shift demand towards low sulfur fuel types.
Technological: Adoption of advanced emission control systems and energy efficient ships could help reduce dependency on conventional bunker fuels in long run. Development of biofuels is also a key focus area.
Key Takeaways
The Global Bunker Fuel Market Size is expected to witness high growth, exhibiting CAGR of 7.1% over the forecast period, due to increasing marine trade activities globally. The market size is estimated to reach US$ 50.79 Bn by 2030.
Asia Pacific region is expected to dominate the global bunker fuel market over the forecast period. This is attributed to large fleet size in countries like China, Japan and South Korea. The region accounts for over 50% of global consumption.
Key players operating in the bunker fuel market are Chemoil Energy Limited, Aegean Marine Petroleum Network, Inc., World Fuel Services Corporation, Gulf Agency Company Ltd., Gazpromneft Marine Bunker LLC, BP Marine Ltd., Exxon Mobil Corporation, Royal Dutch Shell plc, Bunker Holding A/S, and Lukoil-Bunker LLC. The market is consolidated in nature with top 4-5 players accounting for over 50% of global supply. Key players are focusing on backward integration and expansion of storage facilities globally to strengthen supply chain and market presence.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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