Yaw Yan Chong, Director – Research, Wood Mackenzie, on Tuesday (3 March) provided bunkering publication Manifold Times insights on how the current Iran war affects the marine fuels industry:
The following were his observations:
Expect more expensive bunkers in the wake of the US-Israel attack on Iran, following Iranian attacks on merchant shipping in the Gulf of Hormuz.
The Middle East is a major exporter of fuel oil, particularly the high-sulphur grade, averaging at around 2 million mt/month in the 12 months ending in February, or accounting for around 35% of the total imports into the Singapore trading hub, where the world’s largest marine fuels port is located.
Fuel oil’s prompt intermonth Apr/May timespreads for the high‑sulphur 380‑cst grade were valued at $9.50/mt in backwardation at March 2’s Asia close, up from the previous close of $2.80/mt last Friday. Prompt timespreads for the low‑sulphur grade also strengthened, assessed at around $9.50/mt, rising from roughly $3.80/mt.
Major exporting countries include Iran, Kuwait, Iraq and Saudi Arabia, all of whom export via the Straits of Hormuz.
Wood Mackenzie’s analysis suggests fuel oil could be the most exposed product if the Hormuz Straits remain closed for an extended period.
Such a scenario would also lift downstream bunker prices, pushing shipping costs higher, particularly at the UAE’s Fujairah bunker hub, which typically sells 600,000–800,000 mt/month.
Reflecting these concerns, the 380‑cst Apr contract is valued at $482/mt, up from around $415/mt, while the 0.5%‑sulphur grade stands at $540/mt, compared with just under $500/mt previously. This will also lift prices in the downstream bunkers market, making shipping more expensive, particularly in the United Arab Emirates port of Fujairah, a major bunkering hub, with sales of about 600,000-800,000 mt/month.
Actual bunker prices are likely $5-10/mt higher, depending on where premiums for physical cargoes close at end-of-day trading. Prevailing cargo differentials for the 380-cst and the 0.5-sulhpur grades valued at around $5.00-5.50/mt and $2.00/mt respectively, while premiums for ex-wharf bunkers for the grades were at $2.50-3.00/mt and $4.00-4.50/mt in the previous week.
Published: 3 March 2026
