The Global Bunker Fuel Market is estimated to be valued at US$ 33.23 Mn in 2024 and is expected to exhibit a CAGR of 6.6% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the bunker fuel market are ASSURANT INC., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield LLC, Endurance Warranty Services LLC, Edel Assurance, SquareTrade, Inc., and Others. Growing ocean trade volumes across developing regions along with rising demand for cleaner compliant fuels present significant growth opportunities in the market. Hybrid bunker fuels that offer dual fuel capability have emerged as promising alternatives, facilitating reduced greenhouse gas emissions from shipping operations.
Technological advancements in the area of LNG bunkering and availability of hybrid engines capable of utilizing low sulfur fuels are finding increasing adoption in the marine industry. Stringent sulfur cap norms by IMO along with incentives for using cleaner fuels are encouraging ship owners and operators to switch to green maritime solutions.
Market Drivers
The bunker fuel market is expected to witness high growth driven by growing maritime trade volumes globally. Growth in container ships, tankers and dry bulk carriers supporting offshore crude transportation is driving significant demand for bunker fuels. Stringent sulfur content norms introduced by the International Maritime Organization (IMO) to curb marine pollution are further necessitating use of low sulfur compliant hybrid fuels in ships. Bunker Fuel Market Size This is pushing innovations in cleaner marine fuel technologies over the forecast period.
Current Challenges in Bunker Fuel Market
The bunker fuel market is facing multiple challenges currently. Strict regulations around sulphur content in bunker fuel by IMO have increased compliance costs for players. The 2020 cap of 0.5% sulphur content posed operational challenges in switching to compliant fuels. Supply chain disruptions due to the COVID-19 pandemic have impacted bunker fuel availability at some ports. Geopolitical tensions and trade wars have increased crude oil price volatility, impacting bunker fuel procurement budgets of ship operators. Further, the transition towards LNG and other cleaner marine fuels is a long-term challenge for conventional bunker fuel suppliers.
SWOT Analysis
Strength: Bunker fuels remain widely used currently given infrastructure availability for conventional fuels. Established players have scale and supply chain experience.
Weakness: Higher bunker fuel costs impact shipping industry profitability. Reliance on crude oil prices makes demand volatile. Transition towards alternatives could hurt long-term prospects.
Opportunity: Growing seaborne trade volumes drive overall marine fuel demand. New fueled ships and bunkering hubs boost cleaner fuel adoption.
Threats: Tightening emissions regulations accelerate shift to LNG and other fuels. New entrants focus on greener alternatives. Geopolitical issues affect crude supply security.
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