The chief executive of shipping giant AP Moller-Maersk has warned that Asia's key refueling ports risk running out of fuel oil as the Iran war disrupts global supply chains, "Hvylya" reports, citing Bloomberg.
Vincent Clerc told French newspaper Le Monde: "If we do nothing, we risk ending with dry supply points in Asia." The warning came as fuel oil inventories in Singapore and Fujairah - two of the world's three largest bunkering ports - have dropped to critically low levels.
The shipping and oil industries have already begun emergency measures to address the crisis. "We are starting to organize ourselves to transfer stocks from one continent to another and continue operating," Clerc said. Fuel oil is being shuttled from European ports such as Rotterdam and Gibraltar, as well as American hubs including Long Beach and Panama, into Asia.
The shortage stems from the closure of the Strait of Hormuz, which has cut off a major conduit for fuel oil refined in Saudi, Kuwaiti and Emirati plants. Those refineries account for roughly 20% of the world's internationally traded fuel oil, according to the International Energy Agency. While supply remains adequate in Europe and the Americas, the imbalance in Asia threatens to disrupt container shipping, bulk carriers and other vessels that keep global trade moving.
Fuel oil prices in Singapore have surged to $140 a barrel, while in Fujairah - a key refueling stop just outside the Strait of Hormuz - they have reached nearly $160. Some grades meeting stricter environmental standards are fetching as much as $175 a barrel.
Also read: Goldman Sachs calculated how much the Iran war will cost each region.