Iran and Ukraine wars: Why ship fuel is running short, and why it matters
There is less crude in the market, and refiners prefer to produce diesel. The result: ships are running short of fuel.
The shipping industry, already heavily constrained by restrictions on transit through key waterways such as the Strait of Hormuz, faces another challenge stemming from the US-Israel war on Iran and Russia’s war on Ukraine: a shortage of fuel oil used by ships and power plants.
The fuel used by ships powers the transport of large cargoes around the world. Any shortage of this fuel could drive up global freight costs, which could in turn affect consumers and manufacturers of goods and commodities.
Most ships and oil tankers mainly use heavy fuel oil (HFO), commonly known as bunker fuel, to power their engines. This fuel is produced when crude oil is refined.
That has meant an overall shortage in supplies of crude. And oil companies aren’t prioritising fuel oil as their product of choice.