Very Low Sulphur Fuel Oil Market By Fuel Type (Straight Run VLSFO, Blended VLSFO); By End Use (Container Vessels, Bulk Carriers, Oil & Gas Tankers, Ro-Ro/Feeder Ships); By Bunker Delivery Mode (Port-Based Bunkering, Ship-to-Ship Transfers, Barge Delivery); By Geography, Segment Revenue Estimation, Forecast, 2024–2030

1. Introduction and Strategic Context

The Global Very Low Sulphur Fuel Oil Market is projected to be valued at USD 105.7 billion in 2024 , and is forecast to reach USD 147.6 billion by 2030 , expanding at a CAGR of 5.7% during the forecast period, according to Strategic Market Research.

 

VLSFO refers to marine fuel with a sulfur content of no more than 0.5% — a direct response to the IMO 2020 regulation that slashed the allowable sulfur content in bunker fuel from 3.5% to 0.5%. That policy shift effectively rewired the maritime fuel supply chain and accelerated the global transition away from traditional heavy fuel oil (HFO).

 

Between 2024 and 2030, the strategic relevance of VLSFO is no longer just regulatory — it's operational. For most shipping operators, it's become the default compliance route. Unlike scrubber installations or switching to LNG, VLSFO requires minimal capital investment and works across existing vessel engines. That simplicity has made it the “least disruptive” compliance option — and a critical bridge fuel as the shipping industry slowly evolves toward long-term decarbonization .

 

Several macro forces are shaping the next phase of this market. First, global seaborne trade continues to rebound post-COVID, with container, bulk, and tanker fleets expanding fuel demand. Second, refinery configurations have shifted — many now prioritize VLSFO yields in their residue upgrading units. And third, geopolitical disruptions (like the Red Sea crisis and Russian fuel realignment) are impacting global bunker fuel routing, availability, and price volatility — adding more pressure on fuel quality and supply chain stability.

 

The VLSFO market also sits at a unique policy intersection. It’s regulated by international bodies (like the IMO), monitored by regional authorities (such as the EU and U.S. Coast Guard), and driven by fuel quality specs under ISO 8217. In parallel, pressure is building from ESG-focused investors and cargo owners, who are increasingly tracking vessel emissions across their value chains. So, while VLSFO is not a zero-carbon fuel, it’s being used — and scrutinized — as a near-term compliance and reputational hedge.

 

Stakeholders in this market are wide-ranging. Refiners now produce customized VLSFO blends tailored to meet different port specs. Bunker suppliers are repositioning storage tanks and delivery infrastructure around compliant fuel. Shipping lines , especially mid-sized fleets without scrubbers or dual-fuel vessels, are doubling down on VLSFO contracts. Meanwhile, port authorities are tightening quality audits, and data platforms are emerging to trace VLSFO origin, emissions profile, and sulfur content verification.

 

2. Market Segmentation and Forecast Scope

The Very Low Sulphur Fuel Oil (VLSFO) market isn’t segmented like traditional consumer or technology sectors — it’s split along supply chain logic, fuel sourcing, fleet usage, and geography. Here’s how the segmentation breaks down in practice:

By Fuel Type

• Straight Run VLSFO Derived directly from crude distillation, this type tends to have consistent viscosity and low contaminants. Preferred in regions with access to sweet crude and less complex refining.

• Blended VLSFO Created by mixing low-sulfur components like vacuum gas oil (VGO), desulfurized residuals, and cutter stocks. This segment dominates the market, especially in Asia and parts of Europe, where refiners optimize for volume rather than purity.

Blended VLSFO holds over 78% of the global share in 2024, due to its flexibility in meeting varying sulfur caps and availability across more ports.

By End Use

• Container Vessels These are among the highest consumers, running fixed routes and tight schedules that favor predictable, compliant fuels. Many mid-sized fleets use VLSFO exclusively.

• Bulk Carriers Use patterns vary depending on trade routes and charterer requirements. Many are shifting from high-sulfur fuel oil (HSFO) post-IMO 2020 due to rising cost of scrubber maintenance.

• Oil & Gas Tankers With stricter port-state controls in place, most now bunker VLSFO for non-ECA (Emission Control Area) compliance zones and distillates for ECA zones.

• General Cargo and Feeder Ships These smaller fleets rely heavily on port availability. VLSFO offers them logistical simplicity without retrofitting.

Container vessels remain the largest consumers of VLSFO — accounting for over 36% of global demand in 2024 — driven by long-haul operations and tighter ESG disclosures from freight customers.

By Bunker Delivery Mode

• Port-Based Bunkering Still the primary delivery channel, especially across major refueling hubs like Singapore, Rotterdam, Fujairah, and Shanghai.

• Ship-to-Ship (STS) Transfers Increasingly used in congested or deep-sea refueling operations. However, quality and sulfur level assurance remain major concerns, especially in the Mediterranean and West Africa.

• Barge Delivery Offers flexibility for ports with limited onshore fuel infrastructure. Common in secondary Asian and South American ports.

By Region

• Asia Pacific Dominates bunker demand with mega-ports like Singapore and China’s coastal refueling hubs. Regional refiners like PetroChina and SK Innovation lead VLSFO blending and exports.

• Europe Regulations are stricter, especially around carbon intensity. Northern Europe is seeing rising hybrid VLSFO-DMF blends (with bio components) for early compliance with FuelEU Maritime targets.

• Middle East & Africa Refineries in the UAE and Saudi Arabia are tailoring export-grade VLSFO blends, while bunkering hubs like Fujairah are becoming essential for long-haul East-West routes.

• North America While LNG and MGO adoption is rising, VLSFO remains the default outside ECAs. West Coast ports like Los Angeles and Vancouver are tightening dockside monitoring of sulfur compliance.

• Latin America Bunkering infrastructure is still maturing. Panama Canal traffic drives most of the demand, with slow uptake elsewhere.

Asia Pacific is the undisputed volume leader, accounting for roughly 44% of the global VLSFO market in 2024, owing to its refinery capacity and maritime traffic density.

 

3. Market Trends and Innovation Landscape

The VLSFO market may not be a hotbed of radical innovation, but under the surface, it’s shifting fast. From changes in blending strategies to digital bunkering and lifecycle emissions tracking, the fuel that was once just about sulfur limits is now being engineered, audited, and optimized in ways few expected in 2020.

Blending Strategies Are Becoming Smarter — and Riskier

The industry quickly learned that not all VLSFOs are created equal. The initial rush post-IMO 2020 saw inconsistent blends, high sedimentation issues, and compatibility failures — especially for ships switching between regions. Today, refiners are reworking their recipes.

Advanced fuel labs are helping optimize viscosity and density to minimize operational issues. Some refiners have even started shipping “custom VLSFO” batches — designed for specific vessel engines or climate conditions (like arctic or tropical waters). That said, fuel stability still remains a technical concern in parts of West Africa and Southeast Asia, where blend quality varies widely.

One shipping executive put it bluntly: “We don’t just ask if it’s VLSFO anymore. We ask where it came from, what it’s made of, and if we’ve run it before.”

Bunker Fuel Digitalization Is Catching On

Bunkering has historically been opaque — both operationally and commercially. That’s changing. Digital fuel management platforms are rolling out to track VLSFO quality, sulfur content, delivery time, and even GHG footprint. Blockchain -based bunkering logs are being piloted in Singapore and Rotterdam to eliminate disputes over volumes or off-spec fuel.

Shipowners are also integrating fuel compatibility databases to avoid sludge formation when switching VLSFO sources. These systems analyze fuel specs in real-time against engine requirements.

Expect platforms like BunkerTrace , Veritas Petroleum Services (VPS) , and ZeroNorth to become standard tools for mid- to large-sized fleets in the next 2–3 years.

Hybrid Fuels Are Emerging

Some suppliers are starting to offer bio-VLSFO blends — low-sulfur fuel oil mixed with small volumes of biodiesel (usually FAME or HVO). These can reduce lifecycle carbon intensity without needing engine overhauls. Rotterdam and Hamburg are early testbeds, and a few major container lines are running limited trials.

That said, scalability remains a challenge. Biodiesel costs remain high, and cold weather stability of blends is a concern. But pressure from the EU FuelEU Maritime regulation (set to kick in fully by 2025) is nudging the sector in this direction.

Compliance Is Driving More Sampling Innovation

Increased port-state control checks are leading to a wave of third-party fuel testing innovations. Mobile labs, digital certificates of analysis, and even drone-based delivery sampling are starting to appear at major ports.

ISO 8217 updates — especially the upcoming revisions focused on VLSFO sediment levels — are also forcing suppliers to reformulate blends more carefully.

Carbon Intensity Scores Are the Next Compliance Metric

Sulfur content was the first wave. Carbon intensity is the next. Charterers and cargo owners are now starting to ask: What’s the lifecycle CO2 footprint of the fuel used for my shipment?

This is pushing bunker suppliers to develop well-to-wake emissions profiles for different VLSFO blends. Some are partnering with emissions data firms to certify intensity levels — a first step toward voluntary carbon disclosure, and potentially future taxation.

 

4. Competitive Intelligence and Benchmarking

The Very Low Sulphur Fuel Oil (VLSFO) market may seem commoditized at first glance, but there’s growing differentiation at every level — from refining strategy and port presence to digital services and emissions transparency. The real edge isn’t just in the fuel itself, but in how reliably, cleanly, and transparently it’s delivered.

ExxonMobil

ExxonMobil is one of the most vertically integrated players in the VLSFO space. Their EMF.5 product — a proprietary VLSFO blend — is available across more than 40 global ports. What sets ExxonMobil apart is its consistent fuel quality and emphasis on compatibility testing. They're also investing in carbon intensity certification for select fuels, targeting ESG-conscious shipowners .

Their large-scale refining footprint allows them to produce stable blends at scale — especially in Singapore, Antwerp, and Houston — reducing regional variability and fueling confidence among large liner fleets.

TotalEnergies

TotalEnergies has pushed aggressively into hybrid bunker solutions. They were one of the early movers in offering bio-VLSFO blends out of European ports, aimed at helping carriers hit emissions reduction targets without engine conversions. They also provide full traceability and GHG accounting for their marine fuels.

Their bunkering operations in Marseille, Singapore, and Oman offer robust STS delivery and barge support. They’ve also co-invested in digital bunkering tools and blockchain traceability pilots, particularly in the EU.

Shell

Shell leverages its global scale to deliver consistent, compliant VLSFO across major and secondary ports. Its bunkering arm operates more than 15 barges worldwide and is deeply involved in alternative fuel transition services — but in the VLSFO space, Shell is known for quality assurance and logistics efficiency.

Their FuelSave Marine analytics platform helps vessel operators track consumption, emission intensity, and fuel compatibility — a big differentiator for larger customers with mixed fleets.

Shell’s dual strategy? Offer reliable VLSFO for the present, while building transition pathways to LNG and e-fuels in parallel.

BP (Castrol Marine)

BP’s marine fuels division focuses heavily on Europe and the Middle East, with strength in supplying compliant fuel from its Rotterdam, Oman, and South African operations. Through Castrol Marine , they’ve launched VLSFO blends tested for specific viscosity ranges, with strong support for fleetwide compatibility planning.

They've been slower in digital transformation compared to Shell or Total, but their consistent fuel specs and regional coverage keep them competitive among European feeder operators and oil & gas carriers.

PetroChina / Sinopec

These Chinese giants have emerged as major VLSFO suppliers, especially in Asia Pacific , where ports like Qingdao, Zhoushan , and Dalian serve growing bunker demand. Their integrated refining systems — many upgraded post-2018 — now churn out large volumes of VLSFO tailored for export.

Sinopec, in particular, has expanded bunkering infrastructure along the Belt & Road route, making it a strategic partner for container lines operating intra-Asia or China–Middle East loops.

That said, some shipowners still express concern over fuel consistency and sediment issues in certain regional blends, prompting calls for tighter quality control.

World Fuel Services (WFS)

As a leading independent bunker trader , WFS doesn’t refine — but it controls vast volumes of marine fuel movements worldwide. Their edge lies in flexibility: they source VLSFO from multiple suppliers, offering customers pricing transparency and real-time availability.

WFS is also advancing AI-driven fuel procurement and emissions forecasting tools — a big help for operators navigating complex regulatory zones. Their neutrality (non-refiner) allows them to act as a quality broker — matching vessel needs to supplier specs globally.

Key Competitive Insights

• Refiner-backed players (like ExxonMobil, Shell, TotalEnergies ) dominate on quality control and traceability.

• Trading houses and independents (like WFS) win on agility, network breadth, and pricing transparency.

• Asia-based refiners are scaling rapidly but still face skepticism around blend uniformity.

• Digital differentiation — not just logistics — is shaping new customer loyalty. Bunker suppliers offering emissions data, compatibility assurance, and smart planning tools are earning trust faster.

 

5. Regional Landscape and Adoption Outlook

Adoption of Very Low Sulphur Fuel Oil (VLSFO) varies not just by geography but by how each region’s refining capacity, port infrastructure, and compliance culture have adapted post-IMO 2020. While sulfur regulations are globally enforced, the local response — and readiness — remains uneven. Some markets now treat VLSFO as a commoditized input, others still struggle with quality variability, price swings, or sourcing bottlenecks.

Asia Pacific

This is the global anchor of VLSFO consumption — home to over 40% of global bunker demand in 2024. Singapore remains the largest bunkering port in the world, followed by Zhoushan (China) and Busan (South Korea). These hubs have fully transitioned their storage and blending infrastructure to support high-volume, compliant VLSFO bunkering.

Key refiners — Sinopec, SK Energy, Petronas, and ENEOS — have reconfigured FCC units and hydrocrackers to boost VLSFO yield. In China, the government provides export incentives for VLSFO, making it a geopolitical commodity as much as a shipping fuel.

That said, the market isn’t flawless. Regional variability in fuel blend quality persists, especially in lesser-known ports. Several operators have reported off-spec VLSFO in tier-2 Chinese and Southeast Asian bunkering points.

Still, for sheer volume and scale, Asia Pacific is unmatched. If a vessel needs VLSFO in bulk, this is where it looks first.

Europe

Europe leads on compliance, traceability, and emissions data. Ports like Rotterdam, Antwerp, and Hamburg not only offer high-quality VLSFO but are also pioneering bio-VLSFO and hybrid blends . These are especially relevant for operators preparing for FuelEU Maritime regulations kicking in between 2025 and 2030.

Northern European countries — especially the Netherlands and Scandinavia — have also started integrating well-to-wake carbon scoring into bunker procurement processes. This is forcing suppliers to go beyond sulfur content and show lifecycle impact.

Mediterranean ports (like Piraeus, Algeciras, and Genoa) still focus on standard VLSFO, but audits are tightening. Meanwhile, STS (ship-to-ship) operations in the region are under increased scrutiny due to occasional sulfur non-compliance and traceability gaps.

In short: Europe is where compliance becomes competitive advantage. Shippers here want guarantees — not just specs.

Middle East & Africa

The Middle East, particularly the UAE and Saudi Arabia, is carving out a sizable role in the export and regional supply of VLSFO. Fujairah has evolved into a critical East–West refueling point, offering competitive pricing and deep-water access.

Refiners like Saudi Aramco and ADNOC have expanded low-sulfur refining throughput, enabling surplus production of compliant marine fuel. That’s helping to stabilize pricing for vessels transiting between Asia and Europe.

Africa, on the other hand, remains fragmented. Ports in South Africa, Nigeria, and Egypt offer VLSFO, but with inconsistent availability and infrastructure. Smaller ports still rely on older HSFO infrastructure or expensive distillate alternatives.

For long-haul operators, the Middle East is a safe bet for VLSFO top-ups. But in Africa, it’s often a question of: is it available, and can we trust it?

North America

Adoption of VLSFO is high outside Emission Control Areas (ECAs), which still require marine gas oil (MGO) or cleaner fuels. Major bunkering hubs like Houston, Los Angeles, and Vancouver provide compliant VLSFO with robust quality checks.

However, competition from LNG and alternative fuels is intensifying. Several large U.S. shipping firms — especially in coastal trades — have shifted to dual-fuel vessels to prepare for future carbon rules.

One area where North America leads? Digital bunkering systems and real-time emissions tracking. West Coast ports, in particular, are pushing data-centric bunkering, enabling vessels to capture sulfur, CO2, and fuel performance logs for ESG audits.

Latin America

Bunkering capacity is growing, but VLSFO availability is still concentrated in high-traffic areas — Panama (Balboa and Cristobal), Brazil (Santos), and Argentina (Bahía Blanca) .

While refineries in the region have started adjusting for sulfur compliance, supply consistency varies. Brazil’s Petrobras and Argentina’s YPF are expanding low-sulfur capacity, but demand is still sporadic.

Ports in Peru, Chile, and Central America tend to import VLSFO via third-party traders, making pricing less predictable.

Regional Summary

Region	Key Ports	Strengths	Weak Spots
Asia Pacific	Singapore, Zhoushan	High volume, optimized supply chains	Variable blend quality in smaller ports
Europe	Rotterdam, Hamburg	Advanced compliance and hybrid blends	Limited biofuel scale-up (outside North EU)
Middle East	Fujairah, Jeddah	Strategic supply point, refinery-led exports	Few standards in East African ports
North America	Houston, Los Angeles	Digitalization, strong audit systems	Transition pressure from LNG/ESG
Latin America	Panama, Santos	Growing capacity in anchor ports	Uneven refinery integration

 

6. End-User Dynamics and Use Case

End users of Very Low Sulphur Fuel Oil (VLSFO) are primarily vessel operators — but not all vessels are created equal. Depending on the size, trade route, engine type, and emissions compliance needs, each fleet has a different relationship with VLSFO. Some treat it as a bridge fuel. Others have doubled down on it as the long-term play.

Here’s how the main end-user categories break down:

Container Shipping Lines

These are the most consistent VLSFO buyers. The sector has high service frequency, global routes, and demanding cargo owners increasingly pressuring operators on ESG metrics. Most midsize and smaller carriers rely almost exclusively on VLSFO, especially if they haven’t retrofitted for scrubbers or LNG.

Major lines like Hapag -Lloyd, ONE, and ZIM have inked long-term VLSFO supply deals with trusted refiners. These players prioritize fuel quality, predictability, and audit trails over marginal cost savings. Some even bundle bunker procurement with digital emissions tracking tools to report carbon intensity per TEU.

For many of these fleets, switching VLSFO suppliers mid-voyage introduces more risk than reward.

Dry Bulk and Tanker Operators

These players have mixed strategies. Large dry bulk operators — like Oldendorff or Star Bulk — tend to install scrubbers on Capesize vessels but use VLSFO for smaller ones. Tanker owners follow a similar logic: VLCCs may run on HSFO + scrubber, while smaller MR tankers opt for VLSFO to stay nimble.

Spot market fluctuations influence fuel decisions heavily here. Some switch back and forth between fuels depending on port availability, cargo margins, and ECA entry requirements. That dynamic makes flexible VLSFO supply contracts a must-have.

Feeder, Ro-Ro, and Regional Ferry Lines

Short-sea operators — especially in Europe and Southeast Asia — overwhelmingly use VLSFO. These fleets typically lack the space or capital for scrubbers and operate entirely in IMO-compliant zones. Port access and turnaround time matter more than fuel price volatility.

In these segments, VLSFO isn’t just the default — it’s the only viable option for now. Operators rely on barge-based or port tank bunkering , often in under-12-hour windows. Quality assurance is paramount to avoid engine fouling or delays.

Use Case: VLSFO Deployment in the Baltic Sea

A Scandinavian Ro-Ro operator serving routes between Sweden, Germany, and Poland faced repeated cold flow and filter clogging issues in early 2023 — traced back to incompatible VLSFO blends sourced from two ports within the same week.

To fix this, the operator standardized VLSFO sourcing through a single supplier (Shell) across all three terminals. They also added onboard fuel compatibility monitoring software and adjusted their switching protocols.

Within six months:

• Engine alarms dropped by 70%

• Maintenance downtime was cut in half

• Insurance claims for fuel-related incidents fell to zero

This example shows that for smaller regional players, it's not about blending their own path — it’s about simplifying, verifying, and trusting the fuel.

Cruise Lines and Specialized Vessels

Cruise ships often use MGO within ECAs but switch to VLSFO in open seas to balance compliance with comfort (MGO burns cleaner but is pricier). As pressure builds on the sector to green its profile, cruise lines are exploring bio-VLSFO blends , especially on new hybrid vessels entering service from 2025 onward.

 

7. Recent Developments + Opportunities & Restraints

The VLSFO market may have settled into the mainstream since IMO 2020, but there’s been no shortage of movement behind the scenes. From new blending strategies to policy nudges and digital integration, the past two years have brought meaningful developments — and revealed new openings and bottlenecks.

Recent Developments (2023–2025)

• Rotterdam Port Rolls Out Bio-VLSFO Pilot Program (2024) : The Port of Rotterdam partnered with GoodFuels and Maersk to trial a 30:70 biofuel-VLSFO blend for short-sea container services. The trial focused on well-to-wake CO2 savings and showed a 22% intensity reduction compared to standard VLSFO. 

• Singapore Mandates Mass Flow Meters for All VLSFO Deliveries (2024): Singapore — the world’s largest bunkering hub — tightened its transparency rules by requiring mass flow meters (MFMs) on all VLSFO barge deliveries. This move reduces volume disputes and improves audit traceability. 

• TotalEnergies Launches Carbon-Traced VLSFO Line (2023) : Aimed at EU carriers, Total introduced a new marine fuel offering that includes third-party lifecycle emissions validation. The service bundles VLSFO delivery with digital emissions footprint reports. 

• Shell and Maersk Collaborate on VLSFO Monitoring Platform (2025) : The two companies co-developed a real-time compatibility and emissions tracking interface , designed for mixed-fuel fleets operating in Northern Europe. Early rollout focused on reducing sludge risk during fuel switching. 

• Middle East Expands Strategic Reserves for VLSFO (2023) : Saudi Aramco and ADNOC added 5 million barrels of VLSFO to regional strategic reserves to buffer against Red Sea and Suez disruptions, stabilizing East–West bunker supply. 

Opportunities

1. Port-Centric Bio-VLSFO Integration Several ports — especially in the EU — are investing in co-blending infrastructure to mix VLSFO with advanced biofuels (like HVO). For bunker suppliers, this creates a high-margin product line tied to ESG reporting needs.

2. Digital Bunkering-as-a-Service With increased demand for fuel traceability, there’s a growing niche for platforms that provide sulfur certification, fuel compatibility scores, and CO2 intensity metrics — especially in trade lanes exposed to EU and U.S. carbon rules.

3. Emerging Market Expansion Ports in West Africa, Southeast Asia, and Latin America are building out VLSFO storage and blending capabilities. First-movers among fuel suppliers or traders can lock in long-term contracts in currently underpenetrated markets.

Restraints

1. Quality Consistency and Blend Stability Compatibility issues and cold-flow problems continue to plague VLSFO users in secondary ports. Without stricter ISO revisions or better supplier vetting, this remains a barrier — especially for smaller operators with tight engine tolerances.

2. Carbon Pressure from Future Regulations VLSFO may be sulfur-compliant, but its carbon footprint remains high. As FuelEU Maritime and IMO Carbon Intensity Indicators (CII) gain traction, VLSFO could face phase-down pressures in favor of zero- or low-carbon alternatives.

 

7.1. Report Coverage Table

Report Attribute	Details
Forecast Period	2024 – 2030
Market Size Value in 2024	USD 105.7 Billion
Revenue Forecast in 2030	USD 147.6 Billion
Overall Growth Rate	CAGR of 5.7% (2024 – 2030)
Base Year for Estimation	2023
Historical Data	2018 – 2022
Unit	USD Million, CAGR (2024 – 2030)
Segmentation	By Fuel Type, By End Use, By Bunker Delivery Mode, By Geography
By Fuel Type	Straight Run VLSFO, Blended VLSFO
By End Use	Container Vessels, Bulk Carriers, Oil & Gas Tankers, Ro-Ro/Feeder Ships
By Bunker Delivery Mode	Port-Based Bunkering, Ship-to-Ship Transfers, Barge Delivery
By Region	North America, Europe, Asia-Pacific, Latin America, Middle East & Africa
Country Scope	U.S., Canada, Germany, Netherlands, China, Japan, India, Brazil, Saudi Arabia, UAE
Market Drivers	- Regulatory pressure from IMO 2020 - Expanding seaborne trade routes - Growing demand for traceable, low-sulfur marine fuels
Customization Option	Available upon request