Alkagesta Highlights Singapore's Marine Fuel Resilience Amidst 2026 Supply Disruptions

Singapore's marine fuel sector navigated substantial supply disruptions in early 2026, revealing the market's underlying resilience, according to insights from Alkagesta. Mithat Çiftçioğlu, Marine Fuels Distribution Director at Alkagesta Singapore, noted a fundamental change in market discourse, where the primary concern for traders and shipowners shifted from fuel cost to its availability.

This re-evaluation of market priorities emerged in the wake of the Hormuz crisis, which exposed vulnerabilities in global marine fuel supply chains. Despite an initial period of record strength in late 2025 and early 2026, the escalation of Middle East hostilities in late February severely impacted crude oil supply, leading to a sharp increase in VLSFO prices.

Market Dynamics and Supply Chain Resilience

Singapore had entered 2026 on a strong trajectory, with total bunker sales in 2025 reaching 56.2 million metric tonnes, a 3.2% increase over the previous record. This momentum continued into February 2026, with sales hitting 4.61 million metric tonnes, marking a 12% year-on-year rise, accompanied by increased bio-blended and LNG bunker sales. However, the subsequent disruption saw VLSFO prices surge past $1,000 per tonne, approximately double pre-crisis levels. Çiftçioğlu highlighted that strategic petroleum reserves, while potentially stabilizing crude prices, could not immediately resolve the short-term access issues for bunker fuel due to the time required for refining and logistics.

By April, Singapore's bunker sales experienced an 8.7% month-on-month decline to 4.4 million metric tonnes, as tanker arrivals decreased. May saw a second consecutive year-on-year reduction, with sales easing to 4.5 million metric tonnes, as backwardation encouraged shipowners to defer bunkering decisions and reduce stem sizes. Despite these challenges, Singapore's volumes remained within single-digit percentage points of the previous year, a performance Alkagesta attributes to the port's structural depth rather than situational resilience.

Strategic Preparedness and Competitive Landscape

The period also intensified competition from Chinese ports, particularly Zhoushan, which saw vessels divert as the Singapore-Zhoushan VLSFO price spread widened. Chinese refiners, benefiting from competitive feedstocks and government support, maintained refinery output. Ningbo-Zhoushan surpassed Singapore as the world's second-busiest container port in Q1 2026, signaling a growing competitive challenge.

For operators in Singapore, the response has centered on robust infrastructure and supply chain control. Alkagesta Asia, established in late 2024, secured storage capacity at Horizon Terminal by mid-2025, providing direct control over quality, inventory, and delivery. This physical foundation supports a monthly trading volume of approximately 200,000 metric tonnes, primarily VLSFO and LSMGO. The Alkagesta group's substantial commodity trade finance facilities, exceeding USD 1.2 billion with 28 international banks, provided the necessary liquidity to maintain supply continuity during price surges and tighter credit conditions.

Alkagesta emphasizes that its resilience during the March 2026 disruption was a result of long-term preparation, including diversified sourcing, strong compliance standards, and established relationships with banking, shipping, and trading partners. The company's rigorous KYC and sanctions screening, applied before recent regulatory changes, fostered trust and enabled increased credit support and logistics continuity when market conditions deteriorated. This proactive approach ensured uninterrupted supply to customers at a time when many market participants faced difficulties.

Looking ahead, geopolitical uncertainties and the ongoing Hormuz situation continue to influence near-term demand in Singapore. However, Alkagesta's assessment suggests that the medium-term market will favor operators with deep infrastructure, robust compliance, and strong supply chain relationships capable of guaranteeing access. Singapore's long-term position as a leading bunkering hub is expected to remain strong, particularly as environmental regulations and decarbonization efforts drive demand for compliant and lower-carbon fuels, a transition for which the port is well-positioned. Alkagesta's Singapore desk remains focused on building enduring partnerships through consistent and reliable service.

Further reading on Base Oil Trading

Alkagesta Analysis Highlights Dual Supply Pressures Impacting Global Fuel Oil Markets · Dual Chokepoint Pressures Intensify Global Fuel Oil Market Volatility · Malta's Bunkering Sector Undergoes Significant Transition Towards Distillate Fuels · Malta's Bunkering Sector Navigates Regulatory Shifts and Infrastructure Demands