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Marine Bunker Fuel Market size is likely to witness substantial growth over 2021-2027, driven by the significant increase in global trade activities. The main mode of transport for global trade is ocean shipping, with over 90% of the traded goods being shipped by sea. Moreover, high emphasis on decarbonizing maritime transport may result in the adoption of LNG as a potential transition oil over marine gas oils and in turn, escalate the industry forecast.
Bunker fuel refers to the bulk fuel that is taken on board a tanker for use on a fleet of ships to power their engines. This marine-grade fuel is often stored and distributed for refilling from varying commercial sites, depending on the bunker fuel supplier.
Mounting rate of offshore oil and gas exploration activities is one of the prominent trends characterizing the overall marine bunker fuel market dynamics. As per studies, offshore oil and gas drilling is anticipated to exceed 2019 levels over the next 2 years, to reach above 2,700 wells on an annual basis. Additionally, the consumption of cleaner marine fuels such as very low sulphur fuel and marine gas oils, to stay compliant with the MARPOL Convention’s ‘IMO 2020’ regulation will add significant impetus to the market share in the upcoming years.
Considering the vessel type, the oil tanker segment is expected to hold a commendable share by 2027. This is attributable to the growing need for consistent transportation of oil and associated products, to accommodate evolving demand and consumption trends. For instance, according to U.S. Energy Information Administration projections, the total use of liquid fuels, like petroleum, will surge to nearly 22 million b/d by 2050.
On the regional front, the North America marine bunker fuel industry will exhibit a high growth rate through 2027. This is due to the increasing exports of LNG on ocean-going ships or tankers as compared to pipelines in the U.S. In addition, the escalating prices of natural gas and LNG across the international markets have further driven U.S. export activities. These factors will, in turn, contribute to the growth of the regional industry share over the coming years.
Key players operating in the marine bunker fuel market include Total S.A, Lukoil, Neste, Petroliam Nasional Berhad, Gazpromp Neft PJSC, Royal Dutch Shell plc, Chevron Corporation (Standard Oil), Sinopec Group (China Petrochemical Corporation), BP plc, and Exxon Mobil, among others. These market participants are employing strategies like business expansions and new product launches to reinforce their positions across the global market.
For instance, Gazprom Neft completed the crucial stage of construction of Dmitry Mendeleev, an LNG-bunkering vessel, in December 2020. This new vessel was designed to provide bunkering and transportation of low-tonnage LNG fuels at the ports of the Baltic Sea and the Gulf of Finland. In September 2020, ExxonMobil, in collaboration with Stena Bulk, completed a sea trial of its marine biofuel oil bunkered in the Rotterdam port. This new biofuel was designed as a 0.50% sulphur residual-based fuel and processed with a second gen, ISCC-certified waste-based FAME component to reduce CO? emission.
The outbreak of the coronavirus pandemic has caused chaos and disruptions across various industries including shipping and maritime. In order to prevent the escalation of COVID-19, the workforce in these sectors temporarily halted their operations, thus leading to the standstill of all kinds of cargos to be transported via water and air. This global decline in trade chains thus weakened demand for bunker fuels for marine vessels during the crisis.
However, the number of ships at ports to load and unload containers rebounded in several regions during the Q3 of 2020, as per UNCTAD’s data. This represents a sign of revival in world merchandise trade, which encountered a historic Y-o-Y fall of 27% in Q2. The gradual recovery in maritime trade may, in turn, help the marine bunker fuel market regain traction in the near future.