The global shipping industry is facing a sharp escalation in operating costs as fuel prices surge in response to ongoing geopolitical tensions in the Middle East.
According to Transport & Environment (T&E), the sector is now spending an additional $395 million per day on bunker fuel, amounting to more than $5.34 billion in extra costs since the conflict began on February 28.
The data highlights the industry’s continued reliance on fossil fuels, with 99% of vessels still operating on conventional energy sources, leaving shipping highly exposed to market volatility.
T&E argues that the crisis underscores the urgent need to accelerate investment in alternative fuels and energy systems, including electrification and e-fuels, to enhance resilience and competitiveness.
Current bunker prices vary significantly across regions. As of April 1, VLSFO prices range from $750 per tonne in Rotterdam to $1,164 in Los Angeles, while MGO prices reach up to $1,867 per tonne in Singapore.
The cost gap between fossil fuels and cleaner alternatives is narrowing, with T&E estimating that the difference between MGO and e-fuels has dropped to just 5% in key hubs.
Eloi Nordé, shipping policy officer at T&E, described the situation as a “catalyst” for accelerating the transition to sustainable energy, noting that the volatility of fossil fuel markets is increasingly offsetting their traditional cost advantage.
The organisation also pointed to efficiency measures—such as slow steaming, wind-assisted propulsion, and advanced routing systems—as immediate opportunities to reduce fuel consumption and exposure to price shocks.
