SINGAPORE — The closure of the Strait of Hormuz following the Iran war has cut off bunker fuel supplies to Singapore, the world's largest refueling hub for the sludgelike substance that powers ocean shipping. Reserves in Singapore are dwindling and prices are spiking, prompting carriers to slow vessels, revise schedules and accelerate orders for ships that can run on alternative fuels.

Bunker fuel, heavier and dirtier than the refined crude used by cars and airplanes, sinks to the bottom of storage containers and powers the movement of 80% of globally traded goods transported by sea. More than half of global seaborne trade moved through Asian ports in 2024, according to United Nations data.

Before the war, bunker fuel in Singapore cost about $500 per metric ton, or $450 per U.S. ton. As of early May, the price had risen above $800 per metric ton, or $725 per U.S. ton. The daily cost of the Iran war for the global shipping industry is 340 million euros, nearly $400 million, according to the European Federation for Transport and Environment. The average speed of bulk carriers and container ships has slowed globally by around 2% since the war began on Feb. 28, according to Clarksons Research.

June Goh, an oil analyst, said shipping companies are absorbing most of the fuel cost increases for now but that the costs may soon pass on to customers. Asia has increased its use of coal, bought more crude oil from Russia, and revived plans to develop nuclear power to cope with the energy shock.

The Caravel Group owns Fleet Management Limited, which oversees more than 120 shipbuilding projects. Caravel Group CEO Angad Banga said about a third of the ships managed by Fleet Management Limited under construction will be dual fuel capable, running on both conventional bunker fuel and alternative fuels such as liquefied natural gas. There are more than 890 liquefied natural gas–fueled vessels in operation globally.

U.S. President Donald Trump derailed efforts to shift global shipping away from fossil fuels in 2025. "The good news is the technology to create lower-emitting fuels exists," Håkan Agnevall of marine and energy technology manufacturer Wartsila said in a podcast interview. "That improves the business case for green fuels."