Gulf tensions highlight structural challenges in shipping’s energy transition

(Posted on 24/03/26)

Rising geopolitical tensions around the Strait of Hormuz are underscoring a critical reality for the global maritime industry. Despite accelerating decarbonisation efforts, the world economy, and shipping in particular, remains deeply dependent on traditional oil and gas energy systems.

Rob Mortimer, CEO of Fuelre4m, based in Dubai, one of the world’s busiest maritime and energy hubs, emphasised that recent instability in the Gulf has triggered immediate reactions in global energy markets, revealing the disconnect between policy ambitions and operational realities.

“While the industry is moving toward alternative fuels such as LNG, methanol and ammonia, geopolitics operates on a different timeline,” said Mortimer. “The current situation highlights how fragile these emerging fuel systems remain compared to the resilience of established oil and gas infrastructure.”

For more than a century, hydrocarbons have benefited from a vast, highly reliable global supply chain, enabling vessels to refuel virtually anywhere in the world. By contrast, alternative fuel infrastructure is still in its early stages. LNG bunkering is limited to a small number of ports, methanol production remains geographically concentrated, and green ammonia depends on renewable energy and hydrogen systems that have yet to reach industrial scale.

This disparity creates operational risk. In times of disruption, vessels capable of using alternative fuels often revert to conventional fuel oil, effectively making cleaner fuels optional rather than essential.

Mr Mortimer also highlights a broader economic paradox within the decarbonisation agenda. While global emissions reduction remains a central goal, current systems often shift emissions geographically rather than eliminating them entirely. Carbon markets, regulatory differences and globalised manufacturing can result in emissions being offset or relocated instead of reduced.

Within shipping, regulatory frameworks are driving significant investment in new propulsion technologies and fuel systems. However, Mr Mortimer notes that the transition has become heavily focused on fuel replacement rather than fuel reduction.

“One of the most immediate and cost-effective ways to reduce emissions is simply to use less fuel,” he said. “Operational efficiency, improved combustion and optimisation technologies can deliver meaningful reductions today, yet they receive far less policy attention.”

As a result, many shipowners are navigating what has been described as a “compliance-driven economy,” where substantial capital is directed toward meeting regulatory requirements rather than prioritising the most direct emission reduction strategies.

The geopolitical dimension further complicates the transition. Key global tensions continue to centre around energy supply routes from the Strait of Hormuz to European gas corridors and emerging Arctic shipping lanes, reinforcing the continued strategic importance of hydrocarbons.

“The reality is that the energy transition is not yet replacing the existing system, it is being layered on top of it,” Mr Mortimer concludes. “Until the global economy focuses on reducing overall energy consumption, rather than simply substituting fuels, geopolitical events will continue to expose the systems that truly power the world.”