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Bunker Fuel

Hormuz Reopens, But Markets Remain on Edge

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Tensions in the Strait of Hormuz have shifted from acute disruption to fragile stabilisation, following the announcement of a proposed two-week ceasefire. While the headline has injected a degree of confidence into financial markets, the physical reality remains far more constrained. Vessel movements have not normalised, operators remain cautious, and the region continues to function under heightened risk rather than genuine stability. The situation is best characterised as a pause in escalation rather than a resolution.

The scale of disruption is significant. More than 800 vessels remain trapped across the Gulf, with an estimated 20,000 seafarers still onboard awaiting safe passage. The backlog is heavily skewed towards energy cargoes, with crude and refined product tankers forming the bulk of stranded tonnage, alongside LNG and LPG carriers. This concentration matters. The Strait of Hormuz is a critical artery for global energy flows, historically accounting for roughly one-fifth of global oil trade, and any sustained interruption has immediate consequences for pricing, logistics and supply chains.

Markets have responded quickly to the ceasefire announcement, with crude prices retreating sharply from recent highs as the immediate risk of a full supply shock eased. However, the physical oil market remains under strain. Exports from the Gulf have been materially reduced over recent weeks, and the process of restoring flows is neither immediate nor straightforward. Infrastructure constraints, operational delays and continued security concerns mean that even under a ceasefire, the system will take time to rebalance. This divergence between paper market reaction and physical market reality is now a defining feature of the current environment.

Gas markets face a similar dynamic. LNG cargoes remain stranded, and Asian buyers in particular are exposed to prolonged supply delays. Even if transit resumes in a limited capacity, the backlog of vessels and the hesitancy of shipowners to re-enter the region will keep the market tight in the near term. European gas prices have reacted to easing geopolitical risk, but remain sensitive to any renewed disruption or competition for alternative cargoes.

Freight and insurance markets are likely to experience the most persistent dislocation. Tanker availability has tightened significantly, and war risk premiums have risen sharply. Even with a partial reopening, shipowners will continue to price in elevated risk, and charterers should expect higher freight rates and longer lead times. This extends beyond energy markets, with dry bulk and container segments also facing indirect pressure through increased costs, rerouting and scheduling inefficiencies.

For metals and industrial commodities, the impact is more indirect but still material. Lower oil prices provide some relief from an inflationary standpoint and support broader risk sentiment, yet higher logistics costs and ongoing supply chain friction continue to weigh on physical trade. The result is a market where financial conditions appear to improve more quickly than underlying operational realities.

The coming days will be critical. The key question is not whether the Strait reopens in principle, but whether confidence returns sufficiently for normal shipping activity to resume. This will depend on the durability of the ceasefire, the willingness of shipowners and insurers to re-engage, and the outcome of ongoing diplomatic discussions aimed at securing longer-term guarantees for safe passage.

In its current form, the market is no longer pricing a worst-case scenario, but neither is it pricing normality. The geopolitical premium embedded in energy markets has narrowed, yet it remains firmly in place. Freight and insurance costs are unlikely to retrace at the same pace as crude, and physical dislocations will persist even if tensions continue to ease.

The situation in the Strait of Hormuz has therefore entered a transitional phase. The immediate crisis may have been contained, but the system remains under strain. For commodity markets, this is not a return to equilibrium, but a shift into a more uncertain and operationally complex environment where risk remains elevated and recovery is far from assured.

Hormuz Isn’t Fixed—It’s Just Breathing

Weekly Freight Report by Nexus Shipping

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2nd April 2026

The market remains flat overall, with a softer undertone. Pacific activity has been limited, and while tonnage has reduced, rates have largely held steady. Australia has been quiet, but Nopac has seen better grain demand, particularly ex Vancouver for first half April dates. This has tightened prompt tonnage, with vessels being absorbed into these cargoes. While driven mainly by Panamax enquiry, there has been some spillover support into the supra/ultra segment. Bunkers in Nopac are not an issue, with reliable availability in Vancouver. Looking ahead, the balance shifts, with second half April and May positions expected to lengthen as more vessels ballast in from the Far East. In SE Asia / Far East, activity appears stronger on paper than in reality. A significant portion of enquiry is price testing rather than firm demand, with many cargoes failing to progress once rate ideas are known. As a result, underlying demand feels thinner, which could start to weigh on rates. More broadly, uncertainty around bunker prices and availability continues to limit activity, with most operators only covering when required.

There were fresh signs of market activity in the Indian Ocean this week as owners became accustomed to the new reality. This has especially been seen with the increase in Oman port calls, which are paying a premium and being used as a transhipment hub for cargo interests unable to access their usual ports within the Gulf. The bunker situation has also stabilised, with supply back online, removing part of the uncertainty that had been holding many back. Further south, increasing tonnage counts in South Africa are putting some downward pressure on rates in the area. Coal prices in Indonesia and Australia have been more attractive recently, hence the lack of demand for South African product. Sentiment in the area remains cautious, with all eyes on the Middle East and how the situation develops there.

The US Gulf started the week sluggishly, with little in the way of reported activity. However as it progressed some fresh demand surfaced for the larger ships and the prompt tonnage began to clear out. This spurt of enquiry could be down to charterers wanting a clean slate for after the upcoming holidays. The Supra’s have fared better than the Handies, where a bit of fixing and failing has taken place. For the handies to pick up we need to see a material increase in woodpellet demand, but it remains to be seen if this will happen after the holiday weekend.

In the South Atlantic, tonnage is beginning to build, although not at the same pace seen last week. Out of West Africa, several of the larger fronthaul tenders have been pushed back, reducing immediate demand. However, ECSA has seen a pickup in grain activity, absorbing a number of Panamaxes and also providing support to the supramax and ultramax segments. A number of operators are opting to use their own tonnage, as volatility in bunker prices continues to limit arbitrage opportunities. As a result, vessels with bunkers on board are achieving a premium. Bunker availability remains present in key Atlantic hubs such as Gibraltar, although prices have been firming over the course of the week. Looking ahead, grain volumes from ECSA are expected to increase, which should provide underlying support to the market.

Bunker markets continued to remain firm, with prices now around USD 880 pmt in Singapore, USD 850 in Fujairah and USD 760 in Gibraltar, reflecting ongoing disruption in Middle East supply. While availability remains manageable for now, particularly in Asia, this is largely supported by existing inventories, with limited replenishment entering the market. The situation remains fragile, and continued disruption is likely to tighten supply further and keep upward pressure on prices, with widening spreads between regions already influencing refuelling strategies.

Bunker Fuel: The Hidden Commodity Driving Global Trade

Bunker fuel is a commodity few outside the shipping industry recognise, yet it is one of the most critical inputs in the global economy. This heavy residual fuel oil powers the majority of the world’s merchant fleet, bulk carriers, tankers, and container vessels that transport commodities, energy, and manufactured goods across oceans. Roughly 90% of global trade moves by sea, and bunker fuel is the energy that keeps this system operating. Without it, modern supply chains would quickly grind to a halt.
Recent geopolitical developments in the Middle East have sharply highlighted its importance. Disruptions around the Strait of Hormuz, one of the world’s most critical maritime chokepoints, have significantly reduced tanker traffic and constrained refining and fuel oil exports from the Persian Gulf. Production interruptions at major energy facilities have further tightened supply, removing substantial volumes of high-sulphur fuel oil from international markets that normally supply Asian bunkering hubs.
Singapore, the world’s largest bunkering centre, has been among the first to feel the impact. Prices for high-sulphur fuel oil (HSFO) have surged, while very low sulphur fuel oil (VLSFO), the main marine fuel used by modern vessels, has also risen sharply. At the same time, delivery lead times have lengthened as suppliers ration available volumes and tighten contract commitments.
The implications for global trade are immediate. Higher bunker prices translate directly into higher shipping costs. Major container carriers have already introduced emergency fuel surcharges on long-haul routes, while freight rates across key Asia–Europe and trans-Pacific lanes have begun to rise. Bulk commodity shipments and tanker voyages face the same cost pressures.
Because shipping is the final transport leg for most internationally traded goods, rising bunker costs effectively act as a global surcharge on trade. Higher freight costs filter through to the delivered prices of oil, metals, agricultural products, chemicals, and consumer goods. Importers, manufacturers, and retailers ultimately pass these increases along the supply chain.
For this reason, bunker fuel, often overlooked outside specialist markets, plays a central role in the cost structure of global commerce. When its price rises sharply, the effect is felt far beyond the shipping industry, influencing freight markets, commodity flows, and ultimately the price of goods worldwide.