Global shipping disruptions are reshaping trade routes, which is having a chilling effect on Africa's coastal economies.
As ships move away from the Red Sea and around the Cape of Good Hope, ship-fuelling centers along Africa's coastline are seeing an increase in demand, strengthening the continent's role in global bunkering.
Since late 2023, when Houthi attacks on Red Sea shipping began, carriers have been avoiding the Suez Canal and the Bab el-Mandeb Strait. The change has been fueled by the US and Israeli attacks on Iran and the closure of the Strait of Hormuz, raising hopes that prolonged instability will benefit Africa's bunkering sector.
Major container carriers including Maersk, Hapag-Lloyd and CMA CGM said this month they were rerouting ships around the Cape of Good Hope.
Detours increase travel times but allow ships to refuel at emerging African supply points, prompting investment by fuel suppliers and trading houses.
Existing bunker suppliers in Africa, such as Denmark's Monjasa, have reported strong demand in recent years, while new entrants including Vitol, Bunker Partners, Peninsula, Flex Commodities and Global Fuel Supply have announced expansion plans.
“The security situation in the Red Sea has had a positive impact on volumes, causing more vessels to re-route to the south of Africa,” Monjasa spokesman Thorstein Andreasen said.
Monjasa, which has been operating in West Africa for nearly two decades and also supplies fuel to Fujairah, reported a further increase in bunkering activity during the first week of the Iran war.
“Regardless of the outcome of the conflict, we expect overall volatility to remain high for quite some time,” Andreasen said.
New routes are becoming the norm
The scale of change is visible on the Cape Road.
The Cape Chamber of Commerce and Industry said diversions had increased by 112% since the beginning of March, indicating that carriers are now looking at what they see as a permanent change in operations.
“After almost two years of operating under these conditions, it is becoming increasingly difficult to describe our setup as a temporary measure. Instead it has become an adaptation to a new operational reality,” said Bhavan Vempati, head of Asia Market for Ocean at Maersk.
Maersk does regular bunkering at ports in West Africa and Tangiers, he said.
investment follows demand
This trend has encouraged new entrants. In November, Dubai-based Flex Commodities began physical bunkering at Namibia's Walvis Bay and Luderitz.
“We are targeting the growing volume of traffic in the offshore market in and around the Cape, offering an alternative to traditional bunkering stops in the region,” said Rakesh Sharma, managing partner of Flex.
The company is initially focusing on West Africa, where supply lags demand, especially offshore, he said.
Misa Energy, a bunker operator in Ghana, is increasing volumes to meet rising demand in offshore bunkering areas, its operations manager Moses Commodatum told Reuters. He expects the volume of bunkering in Ghana to triple over the next decade.
With Africa's position on global shipping routes supporting regional and intra-African trade, port infrastructure investment and demand, long-term growth prospects go beyond geopolitical disruption, said Tahara Sargent, regional manager for Africa at the International Bunker Industry Association.
At a conference in March last year, the Mauritius Ports Authority had said total bunker fuel sales at Port Louis were set to almost double from 509,837 tonnes last year to a record 929,043 metric tonnes in 2024.
Regulatory issues in South Africa, historically one of the continent's largest bunkering hubs, led to it losing trade to Port Louis and Walvis Bay as bunker volumes fell from about 130,000 tonnes per month in 2023 to about 80,000 tonnes per month in 2024, a PwC report said earlier this month.
Obstacles and risks remain
Industry sources cautioned that African bunkering faces obstacles ranging from piracy and limited infrastructure to uncertainty over supplies as the closure of the Strait of Hormuz cuts Middle Eastern fuel exports.
“Given the reduction in crude oil supplies and reductions in refinery operations, fuel oil supplies are expected to decrease at all bunkering centers,” said Emeril Jamil, a senior analyst at LSEG.
Misa Energy's Commodatum said infrastructure constraints, such as congestion at the Tema port in Ghana and the high cost of products due to tax regimes, remain long-term challenges.
Tax and licensing disputes also create uncertainty.
South Africa's Algoa Bay, seen as a key refueling point for international shipping, has seen a reduction in bunkering capacity since the tax crackdown in late 2023.
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