Ship-refuelling companies along Africa's coast are seeing a surge in business as ​more vessels divert around the Cape ⁠of Good Hope, with war in the Middle East reshaping global shipping routes and boosting the continent's role as a bunkering hub.

Carriers have been avoiding the Suez ‌Canal and the Bab el-Mandeb Strait since late 2023, when Houthi attacks on Red Sea shipping began. U.S. and Israeli strikes on Iran and the closure of the Strait of Hormuz have reinforced the shift, ​prompting expectations that Africa's bunkering sector will benefit from prolonged instability.

Major container carriers including Maersk, Hapag-Lloyd and CMA CGM said this month they are rerouting vessels around the Cape of Good Hope.

The detours extend voyage times ​but ​allow vessels to refuel at emerging African supply points, accelerating investment by fuel suppliers and trading houses.

Existing bunker suppliers in Africa, such as Denmark's Monjasa, have reported stronger demand in recent years, while new entrants including Vitol, Bunker Partner, Peninsula, Flex Commodities and Global Fuel Supply have announced expansion plans.

"Volumes have been positively impacted by the ⁠Red Sea security situation causing more vessels to reroute south of Africa," Monjasa spokesperson Thorstein Andreasen said.

Monjasa, which has operated in West Africa for nearly two decades and also supplies fuel at Fujairah, reported further increases in bunkering activity during the first week of the Iran war.

"No matter the outcome of the conflict, we expect overall volatility to remain high for a considerable period of time," Andreasen said.

NEW ROUTES BECOME 'OPERATIONAL REALITY'

The scale of the shift is visible along the Cape route.

The Cape Chamber of Commerce and Industry said diversions rose 112% as of ​early March, signalling what carriers now ‌see as a lasting ⁠change in operations.

"After nearly two years ⁠of operating under these conditions, it is increasingly hard to describe our setup as a temporary measure. It has instead become an adaptation to a new operational reality," said Bhavan Vempati, head of ​Asia Market for Ocean at Maersk.

Maersk conducts routine bunkering at ports in West Africa and Tangiers, he said.

The trend has encouraged new ‌entrants. In November, Dubai-based Flex Commodities launched physical bunkering at Namibia's Walvis Bay and Luderitz.

"We are targeting the growing volume ⁠of traffic moving around the Cape and the offshore market around the region, offering an alternative to traditional bunkering stops in the region," Flex's managing partner Rakesh Sharma said.

The company is initially focusing on West Africa, where supply remains below demand, particularly offshore, he added.

Misa Energy, a bunker operator in Ghana, is scaling up volumes to meet rising demand in offshore bunkering zones, its operations manager Moses Komodatam told Reuters. He expects bunkering volumes in Ghana to triple in the next decade.

Longer-term growth prospects stretch beyond geopolitical disruption, with regional and intra-African trade, port infrastructure investment and Africa's positioning on global shipping routes supporting demand, said Tahra Sergeant, Africa regional manager at the International Bunker Industry Association.

At a March conference last year Mauritius Ports Authority said overall sales of bunker fuels had nearly doubled at Port Louis to a record 929,043 metric tons in 2024 from 509,837 tons the previous year.

Regulatory issues in South Africa, historically one of the continent's largest bunkering hubs, saw it lose business to Port Louis and Walvis Bay as bunker volumes fell to some 80,000 ‌tons a month in 2024 from approximately 130,000 tons a month in 2023, a PwC report said earlier this ⁠month.

SECURITY AND SUPPLY RISKS WEIGH ON GROWTH

Industry sources cautioned that African bunkering faces obstacles ranging from piracy and limited ​infrastructure to uncertainty over supply as the shutdown of the Strait of Hormuz curtails Middle Eastern fuel exports.

"Given the loss of crude supply and refinery run cuts, fuel oil supply is expected to tighten across all bunkering hubs," said Emril Jamil, a senior analyst at LSEG.

Infrastructure bottlenecks, such as congestion at the Port of Tema in Ghana, and the high cost of products due to tax regimes ​remain longer-term challenges, Misa ‌Energy's Komodatam said.

Tax and licensing disputes also create uncertainty.

South Africa's Algoa Bay, seen as a key refuelling point for international shipping, has seen ⁠reduced bunkering capacity since a tax crackdown in late 2023.

(Reporting by Jeslyn ​Lerh in Singapore and Wendell Roelf in Cape Town; Additional reporting by Jonathan Saul in London; Editing by Florence Tan, Tony Munroe and x)