Some insights on the likely future for oil and gas prices, plus a note on fertilizer prices – no fertilizers means less food per acre.
As the Middle East conflict continues, new data and analysis from Veson Nautical reveals the staggering scale of disruption across global shipping markets, from stranded offshore vessels in the Persian Gulf to rising bunker costs threatening dry bulk demand worldwide.
- Roughly one in five of the world’s offshore vessels are now based in a region that has effectively stopped operating: 1,440 OSVs, 432 OCVs, and 156 jack-up rigs — representing 19%, 18%, and 27% of their respective global fleets — are currently stranded in the Gulf with no clear timeline for resumption, according to Veson data.
- A long-term conflict could split the oil market: Outside the Gulf, Brent crude above $100/barrel is making previously marginal projects in West Africa, Brazil, and the North Sea more attractive, potentially tightening OSV and OCV supply in those markets, adding upward pressure on rates and driving demand for the offshore market outside the Gulf.
- Dry bulk markets face a double-edged dynamic: With 3% of dry bulk trade passing through the Strait of Hormuz, near-term freight rates are being supported by rerouting, trapped vessel supply, and a potential coal-switching surge. However, elevated energy costs and fertilizer trade disruption pose meaningful downside risks to longer-term demand.
- Oil supply concerns drive up bunker prices: Singapore VLSFO bunker prices have roughly doubled from ~$500/t in February to ~$1,000/t in late March, significantly increasing transportation costs and threatening to suppress dry bulk shipping demand the longer the conflict persists.
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