African bunkering hubs benefit as ships avoid Middle East routes

Ship-refuelling companies along Africa’s coastline enjoy a boost as ship avoid the Middle East

Ship-refuelling companies along Africa’s coastline are seeing a surge in demand as global shipping routes shift away from the Middle East, boosting the continent’s role as a key bunkering hub.

• Rerouting global shipping away from the Middle East is boosting demand for ship refuelling services along Africa’s coasts.
• Shipping giants like Maersk, Hapag-Lloyd, and CMA CGM are taking the longer route around the Cape of Good Hope to avoid conflict zones.
• Increased traffic is stimulating investment and expansion from fuel suppliers such as Monjasa, Vitol, Peninsula, and Flex Commodities.
• African ports like Mauritius’ Port Louis, Namibia’s Walvis Bay, and Luderitz have seen significant growth in bunker fuel sales, while South Africa’s share is declining.

Ship-refuelling companies along Africa’s coastline are seeing a surge in demand as global shipping routes shift away from the Middle East, boosting the continent’s role as a key bunkering hub.

Shipping lines have been avoiding the Suez Canal and the Bab el-Mandeb Strait since late 2023 due to Houthi attacks in the Red Sea. More recently, U.S. and Israeli strikes on Iran, as well as the disruption of the Strait of Hormuz, have reinforced this shift.

Denmark’s shipping giant Maersk said Friday it will temporarily reroute some vessels around the Cape of Good Hope, avoiding the Suez Canal due to what it described as “unforeseen constraints” in the Red Sea, Reuters reported. Other major carriers, including Hapag-Lloyd and CMA CGM, have taken similar steps, redirecting ships along the longer southern route.

While the longer route increases travel time, it has opened up new refuelling opportunities across Africa, driving investment from both established players and new entrants. Suppliers such as Monjasa report rising volumes, while companies including Vitol, Peninsula, and Flex Commodities are expanding operations to capture growing demand.

Ports and Investment Rise

The shift is already evident in shipping traffic, with vessel diversions rising more than 100% by early March, according to the Cape Chamber of Commerce and Industry, signalling a more lasting change. Earlier reporting by Business Insider also shows Kenya’s once underused Lamu Port is now seeing a notable increase in activity.

This has encouraged new investments across the continent. Flex Commodities recently launched bunkering operations in Namibia, targeting increased traffic around the Cape and offshore markets. In West Africa, suppliers are scaling up capacity to meet demand, with some expecting volumes to grow significantly over the next decade.

Ports are already benefiting. Mauritius’ Port Louis nearly doubled bunker fuel sales in 2024, while Namibia’s Walvis Bay and Luderitz are gaining prominence. Meanwhile, South Africa has lost some market share due to regulatory challenges, with volumes declining in recent months.

Despite the growth, challenges remain. Industry players point to risks such as piracy, infrastructure bottlenecks, and tightening fuel supply due to reduced Middle Eastern exports. High taxes and regulatory uncertainty in some markets also continue to weigh on expansion.

Credit: Adekunle Agbetiloye, Business Insider