According to a new report published by Allied Market Research, titled,“Bunker Fuel Market by Type and End Use: Global Opportunity Analysis and Industry Forecast, 2018 – 2025,”the global bunker fuel market was valued at $137,215.5 million in 2017, and is projected to reach $273,050.4 million by 2025, growing at a CAGR of 9.4% from 2018 to 2025. Bunker fuel is a type of fuel oil that is used abroad vessels. It is poured into ships bunkers to power its engines. Bunker fuel gets its name from tanks on ports and in ships that it is stored in. Previously, they were known as coal bunkers but now they are called as bunker fuel tanks.
Presently, rise in marine borne trade has increased the demand for bunker fuel and bunkering services. Increase in oil and gas exploration activities in emerging oil regions drive the growth of the bunker fuel market as many bunker fuel suppliers changed their focus of operation to these offshore resource site. In addition, fuel reduction initiatives by shipping industries are expected to hamper the market growth.
Therefore, due to stringent environmental regulations regarding marine environment, shipping industry has decided to reduce the use of residual fuel oil that contains contaminants such as nitrogen and sulfur. Instead of this shipping industry is now changing its focus to looking for new alternative such as LNG which is less harmful to the marine environment. Growth in opportunities for market players to expand business of bunker fuel in emerging economies such as India, Japan, and China are expected to provide lucrative opportunities for the growth of the global bunker fuel market, due to exploration of untapped hydrocarbon reserves in these oil emerging countries.
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Based on type, the global bunker fuel market is segmented into marine gas oil (MGO) and residual fuel oil (RFO). RFO is the heaviest fraction of crude oil distillation with high concentration of pollutants such as sulfur and with high viscosity. Combustion of this fuel produces much darker smoke than other fuels and requires specific temperature for pumping and storage. Due to this drawback, it is the cheapest marine fuel available in the market. MGO is a pure distillate oil and has the lowest sulfur content.
Based on commercial distributor, the market is divided into oil majors, large independents, and small independents. Oil majors are those companies involved in both production and trading of marine fuel products across the world, whereas independents are those that are involved in the trading of marine fuel products across major regions in the world. Small independents trade marine fuel products only in some restricted regions of the world. Major and large independents have advantage over small independents as they are more financially stable and owns storage terminals and blending facilities in major bunkering ports.
Based on end use, the market is divided into container, bulk carrier, oil tanker, general cargo, chemical tanker, fishing vessel, gas tanker, and others (Yacht, refrigerated bulk, cruise). Bunker fuel is increasingly used in heavy transportation vessels to transport containers, bulk carriers, and oil tankers across the world.
Geographically, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific holds the major share in the global bunker fuel market due to the growth in hydrocarbon exploration activities in Asia-Pacific, especially in South China sea. Due to this, many bunker fuel suppliers shifted their operations to the off-shore ports and destination, which are deliberately closer to the offshore hydrocarbon resource site.
Key Findings of the Bunker Fuel Market:
- The Asia-Pacific bunker fuel market is predicted to hold a share of over 46.7% by the end of 2025
- The residual fuel segment is expected to hold a dominant share of over 60.0% in the global bunker fuel market in terms of revenue in 2017, and is predicted to reduce to 41.4% by 2025
- The oil majors, commercial distributor segment is projected to have a share of over 41.6% in 2017, and is projected to reduce to 40.9% by the end of 2025
Market players have adopted agreement, partnership, and expansion as their key strategies to gain competitive advantage in this market. The key players profiled in this report include BP plc, ExxonMobil, Royal Dutch Shell plc, Lukoil, Sinopec Group, Gazprom Neft PJSC, Chevron Corporation, Petroliam Nasional Berhad (Petronas), Total S.A., and Neste.
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