From Long-Term Contracts to Spot Agility More than seven months of military conflict involving the US, Israel, and Iran have fundamentally disrupted how the global shipping industry procures marine fuel. With fuel prices remaining more than 70% above pre-war baselines and key Middle Eastern waterways facing blockades, fleet operators are abandoning fixed, single-port agreements. Instead, buyers are pivoting toward immediate spot transactions and ultra-short commitments to navigate severe price volatility and frequent vessel rerouting.
Minimizing Price Exposure Unlike fixed-term contracts that obligate buyers to lift predetermined volumes regardless of market swings, spot buying allows shipowners to time their fuel purchases strategically based on daily rates. Speaking at an international maritime fuel conference in Singapore, Peter Grunwaldt—CEO of Seascale Energy and head of marine fuels at tanker operator Hafnia—noted a sharp rise in the frequency of smaller refuelling orders, as vessels often take on just enough minimum fuel to reach their next destination when prices spike.
Mikkel Kannegaard, COO of industry giant Bunker Holding, explained that elevated market levels make buyers hesitant to lock in rates that could drop the very next day, leading to a much more fragmented and complex fuel trading landscape. According to Choong Zhen Mao, Executive Director at Singapore’s Equatorial Marine Fuel, traditional six-to-twelve-month supply agreements have now compressed into quarterly or even monthly deals.
Redrawing the Refuelling Map Beyond contract restructuring, heightened security risks around the UAE’s Fujairah port—historically a premier refuelling hub—are forcing vessels to seek safer supply locations. Traditional refuelling networks across the Arabian Gulf have fractured, redirecting demand toward Africa, South Asia, and previously secondary ports such as Salalah (Oman), Colombo (Sri Lanka), and Port Louis (Mauritius).
Major fuel suppliers are rapidly adapting their infrastructure to match these shifting trade flows. In July, energy trader Vitol established maritime refuelling operations at Pakistan’s Gwadar Port, strategically situated outside the Strait of Hormuz to safely service vessels operating near the Gulf. As Kieran Gallagher, Vitol’s Head of Asia, emphasized, expanding geographic supply nodes and forging new trade routes for conventional fuels has become critical for both immediate crisis management and long-term operational resilience.
