The Bunker Fuel Market is estimated to be valued at US$ 28.84 Bn in 2023 and is expected to exhibit a CAGR of 7.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Bunker fuel is a type of fuel oil used aboard vessels. It is typically used in ship bunkers to power diesel-electric engines on ships. It has a high density and viscosity, requiring heating and pumping for proper atomization so that it can be burned efficiently in maritime diesel engines. Bunker fuels offer advantages such as high viscosity and density for ease of handling and storage. They also provide cost-effective fuel for marine transportation.

Market key trends:
One of the major trends in the bunker fuel market is the transition towards low sulphur fuels. The International Maritime Organization (IMO) has implemented new regulations to significantly reduce the limit for sulphur in fuel oil used on board ships. The new regulation limits sulphur content in marine fuel to 0.5% globally, down from the previous 3.5%, which is expected to drive demand for low sulphur compliant bunker fuels. The key driving factor behind this shift is to reduce sulphur oxide emissions from ships, in order to improve air quality. Shipowners are investing in exhaust gas cleaning systems and adopting fuels such as low-sulphur fuel oil, liquefied natural gas, and biofuels. This shift is expected to support the growth of the bunker fuel market during the forecast period.

Porter’s Analysis
Threat of new entrants: Low capital requirements and no major economies of scale makes the threat of entry high in this market. However, established buyers prefer to deal with known reliable suppliers which create barriers for new entrants.
Bargaining power of buyers: The bargaining power of buyers is moderate as bunker fuel buyers include commercial ships that require reliable suppliers. Fuel quality standards influence the buyer options.
Bargaining power of suppliers: A handful of large companies controls production and infrastructure facilities which gives them higher bargaining power over price setting. However, competitive supply prevents complete control.
Threat of new substitutes: No major substitute exists currently for bunker fuels used in shipping however, R&D in renewable fuels may pose a future threat.
Competitive rivalry: Intense completion exists among existing players to cater increasing demand.

SWOT Analysis
Strength: Established infrastructure and global supply network of key players ensure reliable fuel availability. Rising seaborne trade increases demand potential.
Weakness: Vulnerable to oil price volatility and fluctuations in demand due to economic cycles. Stricter emission regulations increase compliance costs.
Opportunity: Expanding fleet size and tonne-kilometers increased bunker fuel volumes. Alternate fuels R&D opens new growth avenues.
Threats: Shift towards low carbon economy endangers long term prospects. Intense price wars among established suppliers impact margins.

Key Takeaways
The Global Bunker Fuel Market Size is expected to witness high growth, exhibiting CAGR of 7.1% over the forecast period, due to increasing global seaborne trade volumes. Maritime transportation facilitates trade across 90% of world merchandise trade volumes accounting for over 50% of global goods transportation. Growth in ship numbers and distances traveled directly boost bunker consumption.

Regional analysis Asia Pacific dominates global bunker fuel demand currently accounting for over 60% shares led by China, Singapore and India. The region is expected to maintain its lead due to concentration of ship repairing and ship recycling hubs besides major ports. Northwestern Europe and Middle East are other major markets riding on extensively developed bunkering infrastructure and strategic locations on global shipping routes.

Key players operating in the bunker fuel market are Chemoil Energy Limited, Aegean Marine Petroleum Network, Inc., World Fuel Services Corporation, Gulf Agency Company Ltd., Gazpromneft Marine Bunker LLC, BP Marine Ltd., Exxon Mobil Corporation, Royal Dutch Shell plc, Bunker Holding A/S, and Lukoil-Bunker LLC. Major players focus on strengthening supply chain and developing alternative fuel solutions to tap into future opportunities arising from regulatory push for cleaner fuels.

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