Iran-Ukraine War Sparks Global Fuel Shortage Crisis
· deals
Fueling Global Chaos: How Wars Are Devastating Ship Fuel Supplies
The ongoing conflicts in Ukraine and Iran have claimed yet another victim: ship fuel. Heavy fuel oil (HFO), also known as bunker fuel, has become increasingly scarce due to a combination of factors. Reduced crude oil exports from key regions and refiners’ preference for more profitable products like diesel are major contributors.
Middle East fuel oil exports have plummeted by 45% year on year, averaging just 447,000 barrels per day from March to August. Energy consultancy Energy Aspects predicts a deficit of 218,000 bpd in the third quarter – a trend not seen since 2025. This shortage is having far-reaching consequences across the globe.
The Strait of Hormuz, through which about 20% of global oil and gas passes, has become a major chokepoint due to tensions with Iran. Attacks by Yemen’s Houthis on shipping in the Red Sea have further disrupted supply routes. Meanwhile, Russia’s ongoing war on Ukraine has crippled Ukrainian refineries, reducing fuel oil exports to a record low of 591,000 bpd in August – down from an average of over 860,000 bpd in 2025.
When diesel margins become exceptionally high, refiners prioritize producing more lucrative products like diesel. This decision is made at the expense of fuel oil production, which is sent through secondary processing units to upgrade it into higher-value products. The net result is less crude being shipped out, leading to an overall shortage.
The impact on global trade will be severe, particularly in Asia, where countries like Singapore are heavily dependent on Gulf oil imports. In Singapore, the price of shipping fuels like VLSFO has skyrocketed by 76% since the war on Iran began. Fuel oil stocks are about 30% below their three-year seasonal averages.
The broader economic implications are more profound still. Market observer Sunil Reddy warns: “Without ships, globalisation breaks. When ship fuel becomes too scarce or too expensive, many things don’t just become more expensive; at some point, some trade simply stops making economic sense.” As the world grapples with the consequences of these wars on global supply chains, it’s clear that this crisis is not a temporary blip – but rather a symptom of deeper structural issues within our global economy.
Reader Views
- SBSam B. · deal hunter
"The article highlights the obvious: wars disrupt supply chains, but let's not forget that refiners have a crucial role in exacerbating this crisis. By prioritizing high-margin diesel production over fuel oil, they're essentially choosing profit over reliability. It's time for governments to step in and regulate refining operations, ensuring a steady supply of ship fuels isn't sacrificed at the altar of short-term gains."
- PRPat R. · frugal living writer
The war-induced fuel shortage is more than just a economic inconvenience - it's a recipe for environmental disaster. The shift towards diesel production at the expense of HFO is a shortsighted decision that will only exacerbate the situation in the long run. With global trade already on shaky ground, we can't afford to ignore the consequences of reduced refining capacity and increased reliance on less efficient fuels. It's time for policymakers to take a hard look at their priorities and start investing in sustainable energy alternatives before it's too late.
- TCThe Cart Desk · editorial
"The article highlights the ripple effects of the Iran-Ukraine conflict on global fuel supplies, but misses a crucial point: this shortage is not just about ship fuel, it's about food and medicine too. The World Food Programme relies heavily on bunker fuel for its sea-based aid deliveries. A 218,000 bpd deficit could spell disaster for vulnerable communities worldwide who depend on timely humanitarian assistance."