By Enes Tunagur
LONDON (Reuters) -Stricter environmental regulations and slower global economic growth will soften marine fuel demand in the coming years, the International Energy Agency said in its annual report on Tuesday.
Marine fuel sales jumped last year due to Red Sea disruptions that made shipping companies take longer routes.
But demand for those fuels, also called bunkers, could flatline at around 5 million barrels per day (bpd) in 2024-2030, because of weak underlying shipping growth and rising costs from tougher maritime environmental standards, the IEA said.
Last April, member states of the International Maritime Organization (IMO), the United Nations’ shipping agency, agreed on a carbon pricing mechanism to help the shipping industry reach net zero emissions by 2050.
The mechanism, pending final approval in October 2025, will require ships to pay a penalty for above-target greenhouse gas emissions from 2028. Shipping transports over 80% of all traded goods and causes nearly 3% of greenhouse gas emissions, according to UN data.
Tariffs will create a harsher environment for global trade and shipping, potentially affecting bunkers disproportionately, and this could accelerate the ongoing disconnect between economic growth and maritime trade, the IEA said.
Attacks on vessels in the Red Sea that forced some to avoid the Suez Canal initially supported bunker sales, adding 140,000 bpd to international bunkering demand last year, although this was only slightly above trend, the IEA said.
At the same time, weak economic growth and soaring freight and insurance rates acted as headwinds, the IEA added.
(Reporting by Enes Tunagur, editing by Alex Lawler and Tomasz Janowski)
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