Global commodity trading firm Mercuria has issued a stark warning about the potential for marine fuel shortages at major bunkering hubs within months, as the ripple effects of the Middle East conflict continue to reshape global energy supply chains.
According to S&P Global Commodity Insights, Larry Johnson, Mercuria’s global head of freight, warned that regional stock-outs of marine fuel oil could emerge as early as July, with potential outages at major hubs possible by August or September at the latest. In a worst-case scenario, Mercuria believes the shortages could effectively shut down as much as 10% of the global fleet, Ship & Bunker reports.
The Supply Chain Behind the Warning
The underlying driver is the dramatic slowdown in traffic through the Strait of Hormuz following the outbreak of conflict in and around Iran at the end of February, as reported by Ship & Bunker. This disruption has curtailed significant volumes of crude and refined product flows from the region, while also cutting off Asian refineries from their usual Middle Eastern crude supply.
In response, refineries worldwide have been redirecting production toward middle distillates — a higher-value product facing acute demand pressure. The knock-on effect is a reduction in residual fuel output, the feedstock for marine fuel oils like VLSFO, as more residues are being processed through fluid catalytic cracking (FCC) units to maximize distillate yields.
What Prices Are — and Aren’t — Saying
Despite the warning, current market prices have not yet signalled an impending shortage. Ship & Bunker’s G20-VLSFO Index stood at $864.50/mt on Wednesday, down 17.9% from its March 20 peak, though still 59.1% above its pre-war level from February 27.
However, the spread between VLSFO and MGO offers a more telling signal. The G20-VLSFO Index was trading at a $478/mt discount to the G20-MGO Index — a divergence that supports the narrative of distillate production being prioritised at the expense of fuel oil supply.
Mercuria holds particular weight in this conversation given its ownership of Minerva Bunkering, one of the world’s largest bunker suppliers. According to Ship & Bunker’s Top Ten Bunker Firms for 2026 report, Minerva sold approximately 16.2 million mt of bunker fuel last year, representing roughly 6.5% of global consumption.
Does This Matter to You?
The warning carries meaningful weight for anyone involved in marine fuel procurement, vessel scheduling, or supply chain planning. If supply constraints materialise at key bunkering hubs over the coming months, availability and pricing at critical refuelling points could shift rapidly — with limited advance notice.
It is worth noting that not all voices in the industry share Mercuria’s level of concern. Ship & Bunker reports that former IBIA Chairman Constantinos Capetanakis cautioned in late March that price reactions to the Middle Eastern situation risked being exaggerated as a means of increasing industry profits, stating: “There is no supply tightness in the sense that one cannot get it if you have the money to buy it.”
Whether market signals will begin to reflect Mercuria’s outlook in the weeks ahead remains to be seen.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker, S&P Global Commodity Insights (as cited by Ship & Bunker)
