Singapore, the world's largest marine fuel bunkering hub, is navigating its most severe supply squeeze in years as the Iran war and Strait of Hormuz closure starve the city-state of Middle Eastern crude and fuel oil feedstocks. Residual fuel oil inventories in the port have sunk to near one-year lows while bunker delivery lead times have stretched to 14 days for some grades, data from Enterprise Singapore and industry platform ENGINE show.
Combined onshore oil product stocks in Singapore totaled 44.83 million barrels in the week to May 6, the lowest since late July 2025, Reuters reported citing Enterprise Singapore data. Residual fuel oil inventories — the most stored product in Singapore's tanks and the primary source of marine fuel — stood at 19.88 million barrels, hovering near the prior week's 50-week low of 19.49 million barrels. Imports from the Middle East, which historically supplied a significant share of Singapore's fuel oil feedstocks, have remained near zero since the conflict erupted in late February.
Kpler vessel tracking data shows overall fuel oil exports via the Strait of Hormuz typically totaled about 3.7 million tons per month, with roughly 1.2 million tons per month bound for Asia and about 70% of that destined for Southeast Asia — the vast majority feeding Singapore's bunker market. Tanker transits through the chokepoint are now approximately 90% lower than pre-war levels, according to Kpler's analysis. "When such a large share of the global high-sulphur complex depends on a single chokepoint, even partial transit disruption can tighten balances quickly and amplify bunker volatility," said Sumit Ritolia, lead analyst for refining and supply modelling at Kpler.
Price pressures have been relentless. Before the Iran war, Singapore bunker fuel traded at roughly $500 per metric ton. VLSFO 0.5% sulphur grade touched a record high of $1,191.23 per ton delivered on board Singapore on March 9, up 131% from $515.52 per ton assessed by Argus on February 27, according to Manifold Times. By early May, VLSFO prices had settled back to the $800 range but remain at historically elevated levels more than 60% above pre-war benchmarks. On May 21, VLSFO was assessed at $834 per ton, HSFO at $625 per ton, and LSMGO at $1,203 per ton.
The Maritime and Port Authority of Singapore reported that total bunker fuel sales in April 2026 reached 4.35 million metric tons, down 1.2% year-on-year from 4.40 million tons in April 2025. Notably, marine fuel oil (HSFO) deliveries actually rose 5.3% year-on-year to 1.79 million tons, suggesting fuel switching as buyers seek cheaper high-sulfur alternatives amid the price spike. Low sulfur fuel oil (LSFO) deliveries slipped 2.2% to 2.19 million tons.
Supply constraints extend well beyond Singapore. In Fujairah, the Middle East's premier bunkering hub, fuel availability remains tight across all grades with demand dropping substantially as vessels wait to transit the Strait of Hormuz. The ARA hub in Europe is seeing loading delays that have doubled lead times to 10 days, with independently held fuel oil stocks averaging 13% lower in May than in April, according to Insights Global data cited by ENGINE. Japanese ports face extremely scarce LSMGO availability due to a domestic gasoil shortage.
Imports from Russia and Brazil have partially offset the loss of Middle Eastern barrels, Ship & Bunker reported, with fuel oil tanker transits (Handysize and above) plunging to single digits from 40-45 transits per month in January. However, prompt availability in Singapore remains very tight, with VLSFO delivery schedules stretching to 12-14 days and HSFO lead times at 9-14 days as of mid-May, according to ENGINE's East of Suez Bunker Fuel Availability Outlook.
Singapore's role as a refining and trading hub may provide some buffer. The country's Jurong Island refineries continue to process crude from alternative sources, including rising volumes from the Americas and Russia, and the government is exploring expansion of underground fuel storage at the Jurong Rock Caverns. However, as Minister-in-charge of Energy Tan See Leng noted, elevated fuel prices are expected to persist even if hostilities cease. Bunker fuel shortages feed through to shipping costs more quickly than other cost pressures, with the cumulative effect rippling across global supply chains and ultimately influencing consumer prices across a broad range of sectors.