Marine Fuel Availability: FONAR Friend?

Executive Summary

The continuing fragility of the security situation in the Middle East has materially disrupted global energy and marine fuel supply chains. As a vital energy corridor, disruption to the Strait of Hormuz has already resulted in vessel congestion, sharp increases in marine fuel prices, and growing concerns among Owners and Charterers regarding the physical availability of compliant marine fuels.

In this context, this article examines a number of recurring questions raised by Members since the outbreak of the Conflict, focusing on the following key operational, contractual, and regulatory risk areas:

• Seaworthiness and due diligence: Where marine fuel scarcity is foreseeable, inadequate voyage planning and bunkering arrangements may expose Owners to allegations of unseaworthiness on delivery or at the commencement of a voyage.
• Charterparty risk allocation: Disputes may arise as to which party bears responsibility for procuring compliant marine fuel, the availability of contractually nominated fuels, and what alternative procurement measures were reasonable in the prevailing circumstances.
• Fuel Oil Non-Availability Reports (FONARs): FONARs remain a measure of last resort under MARPOL Annex VI and are only appropriate where compliant fuel is physically unobtainable despite all reasonable efforts. High prices or commercial inconvenience alone do not justify their use, and misuse can lead to Port State Control sanctions.
• Deviation and operational adjustments: Decisions to deviate from customary routes, reduce speed, or alter voyage plans in order to obtain or conserve fuel must be carefully assessed against charterparty obligations and applicable liberty clauses. Unreasonable deviation may also carry insurance implications and should be discussed with the Club at an early stage.  
• Documentation and early engagement: Members are strongly encouraged to maintain clear and contemporaneous records of fuel enquiries, voyage planning, operational decisions, and compliance efforts. Strengthening fuel quality safeguards, consideration of targeted contractual amendments, and early engagement with counterparties and the Club will be key to managing disruption-related risks and ensuring ongoing regulatory compliance.

Introduction

The situation in the Middle East (the “Conflict”) has deteriorated sharply following the de facto closure of the Strait of Hormuz by Iranian forces on 28 February 2026. Despite the recent announcement of a ceasefire between the U.S. and Iran, talks over the weekend failed to reach a wider peace agreement. Reports suggest that the Iranian Revolutionary Guard Corps’ (“IRGC”) intend to continue measures aimed at disrupting commercial shipping, with the U.S. in turn now threatening their own retaliatory measures. Against this backdrop, the risk of ongoing disruption, and further attacks on commercial vessels, is likely to have significant implications for marine fuel availability globally.  

Approximately 25% of global crude oil and 20% of worldwide LNG shipments normally pass through this corridor, making it one of the most critical maritime chokepoints in global energy logistics. The attempted closure has already caused marine fuel prices to more than double in key supply hubs, with Owners increasingly concerned not only about price volatility but also the physical availability of compliant marine fuel. As Owners and Charterers increasingly avoid the Middle East, congestion continues to build in alternative routes and bunkering hubs, particularly around Singapore, placing additional pressure on already constrained marine fuel inventories.

In this evolving environment, Owners and Charterers are facing an increasingly complex operational and legal landscape. Parties need to consider seaworthiness, fuel procurement obligations, MARPOL Annex VI (“MARPOL”) compliance, and the potential need to rely on the IMO’s Fuel Oil Non-Availability Report framework (“FONAR”) where compliant fuel cannot be sourced.

Notwithstanding the apparent current ceasefire, Owners and Charterers should consider treating fuel availability as a foreseeable operational constraint. Conservative voyage planning, early identification of supply risks, and the maintenance of clear contemporaneous records to support decisions on routing, bunkering and regulatory compliance will be essential in mitigating exposure as the situation continues to evolve.

1. Does fuel non-availability affect seaworthiness under the charterparty?

   To answer this question, we must first understand what we mean by “seaworthy”. The classic definition of seaworthiness comes from the third edition of Carver’s Carriage of Goods by Sea published in 1900, where it was said that “The ship must have that degree of fitness which an ordinary careful owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it. Would a prudent owner have required that it should be made good before sending his ship to sea, had he known of it?”.

   Here we can see that seaworthiness is assessed at the relevant commencement point, typically delivery under a time charter or at the commencement of the voyage under a voyage charter. Owners must exercise due diligence to equip the vessel properly, including ensuring that sufficient marine fuels are onboard for the intended service. However, what does this mean from an operational and practical standpoint?

   Voyage Planning and Foreseeability

   In short, a robust voyage fuel plan should consider:

   • Passage distance and expected port times;
   • Weather and consumption variables;
   • Deviations and potential congestion; and
   • A prudent fuel safety margin to absorb unplanned consumption events.

   Documented procedures within the Safety Management System (SMS) strengthen an Owner’s evidence of seaworthiness, or at least the exercise of due diligence, by showing proactive assessment and recordkeeping.

   Given the current Conflict, there are increasing concerns that bunkering may be widely disrupted. There are already reports circulating of distributors in Singapore rationing supplies and prioritising customers. If disruptions present a credible and foreseeable risk, “Prudent Owners” might be expected to plan more conservatively, taking a risk averse approach. Depending on the vessel and voyage specifics, measures could include:

   • Increasing reserve marine fuel quantities where feasible;
   • Securing multiple bunkering options;
   • Adjusting speed or route in anticipation of scarcity.

   A failure to plan for foreseeable scarcity may expose Owners to allegations that the vessel was unseaworthy at on delivery or on commencement of the voyage. It is important to remember that due diligence in this regard rests with Owners and is a non-delegable obligation.  

   Charterparty Allocation of Marine Fuel-Related Risk

   Charterparties typically allocate responsibility for marine fuel procurement and compliance, often via industry-adopted clauses from the likes of BIMCO, or bespoke clauses negotiated between the parties. In a disruption scenario, disputes will likely centre on:

   • Who bears the obligation to provide the vessel with compliant marine fuel?
   • Whether the nominated marine fuel was in fact “available”.
   • Whether it was reasonable for alternative arrangements to be made, in the circumstances.

   In time charter scenarios, Owners cannot generally be held responsible for failing to maintain speed if doing so would result in marine fuel exhaustion, particularly where Charterers bear the bunkering obligation. 

   Where charterparty clauses impose continuing performance or dispatch obligations, marine fuel scarcity may trigger:

   • Off-hire disputes;
   • Performance and speed warranty claims;
   • Delay or deviation arguments.

   Where availability concerns of compliant marine fuel materialise during the voyage, Owners, acting in consultation with Charterers, may explore opportunities to supplement marine fuels at intermediate ports. Major hubs such as Singapore, Gibraltar, Las Palmas, Curaçao, Balboa and Cristóbal (either side of the Panama Canal) offer strategic locations for replenishment with minimal deviation, subject to the vessel’s commercial commitments and any applicable liberty clauses; however, many of these major hubs, especially those reliant on product exiting the Strait of Hormuz, will need to balance the expected increased demand against potential dwindling supply of compliant marine fuel.

2. What options are available to Ship Owners and Charterers where compliant marine fuel sources do become unavailable?

   MARPOL is designed to ensure vessels use marine fuels that meet prescribed commercial compliance requirements (the ISO 8217 quality parameters under the charterparty), and regulatory compliance (for example, including sulphur limits and marine fuel quality controls). In exceptional cases where compliant marine fuel is physically unavailable, a FONAR may be submitted under Regulation 18.2.1 of MARPOL.  

   Key principles of the FONAR

   1. A very high evidential threshold

      The high cost of marine fuel during times of scarcity is not a valid justification for using a FONAR. Owners must demonstrate that compliant marine fuel was physically unobtainable in the relevant time and place; this might extend to the availability of marine fuels from the time the scarcity was reasonably foreseeable.

      Importantly, MARPOL stresses that compliant marine fuel is the goal, not the grade of marine fuel. Therefore, if a vessel arrives at a port where VLSFO is unavailable, but compliant Gas Oil is available (even at an inflated price), the vessel is likely to be expected to stem the Gas Oil, and a FONAR application in such circumstances would likely be rejected.

   2. All reasonable efforts

      To successfully defend a FONAR application, the party responsible for procuring the marine fuel may be requested to provide evidence of:  

   • Enquiries to multiple suppliers;  
   • Consideration of alternative ports;
   • Operational mitigations (routing/speed);  
   • Technical concerns over quality/compatibility where applicable.

   Consequences of abusing the FONAR procedure 

   Members should remember that FONARs should be considered a tool of last resort. Port State Control Authorities (“PSC”) may:

   • Check with suppliers at the port to assess the availability of compliant marine fuel;
   • Check whether other vessels are reporting a lack of availability of compliant marine fuel; and/or
   • Consider whether any FONARs have been submitted by the vessel in the past 12 months. (following a successful FONAR application, documentation must be retained onboard for 36 months).  

   It should be noted that a successful FONAR application is not a “free pass” to consume or carry non-compliant marine fuel. Vessels are only permitted to bunker the minimum amount of non-compliant marine fuel needed to get the vessel to the next port at which compliant marine fuel can be sourced. Even in circumstances where Charterers are responsible for planning, sourcing, and providing marine fuel to the vessel under a time charterparty, as Owners remain responsible for regulatory compliance, it is likely Owners who will be requested to submit the FONAR application. Owners should therefore take steps to satisfy themselves that the criteria have been met.  

   Member States may impose “appropriate control actions”, including fines or administrative sanctions. In more serious cases, PSC authorities may require the vessel to debunker, undertake tank cleaning and load compliant marine fuel. The vessel may also be detained until compliance is achieved to the satisfaction of the authorities. Such measures can be onerous, costly and operationally disruptive.

   Details of MARPOL non-compliance are recorded in the PSC MOU databases and shared among Member States, potentially resulting in increased scrutiny at future inspections.

   Club Cover

   The costs of debunkering and/or any regulatory fines imposed as a result of MARPOL non-compliance in these circumstances are likely to fall outside the scope of Owners’ and/or Charterers’ P&I cover. Losses arising from such non-compliance, including delay and associated operational consequences, may also give rise to charterparty disputes, in respect of which FD&D cover may be available, subject to the applicable terms and usual Rules considerations.  

3. What are an Owners’ rights regarding deviation and slow-steaming?

   A vessel is generally obliged to proceed on the customary route to the discharge port with utmost dispatch. Deviation includes not only geographical divergence but also operational delays such as slow steaming.  

   Slow steaming solely to conserve marine fuel is typically considered a breach of the charterparty obligation, and an unreasonable deviation, unless protected by a liberty clause, slow steaming clause, and/or justified on safety grounds. However, in a confirmed global shortage scenario, Owners may reasonably argue that reduced speed was necessary to preserve safe propulsion.  

   The Master retains overriding obligation as to the safety of the vessel, its crew and cargo which in extreme circumstances allows the Master to refuse to comply with Charterers’ instructions, as set out in the Hill Harmony, where Hobhouse LJ stated that:

   The master remains responsible for the safety of the vessel, her crew and cargo. If an order is given compliance with which exposes the vessel to a risk which the owners have not agreed to bear, the master is entitled to refuse to obey it: indeed, as the safe port cases show, in extreme situations the master is under an obligation not to obey the order.

   Owners must remain mindful that an unreasonable deviation may prejudice P&I cover due to the potential loss of Hague-Visby Rule defences. A minor geographic deviation to obtain available marine fuel required for the voyage is generally considered reasonable and unlikely to breach the contract of carriage; however, we strongly recommend that Members approach the Club in advance to consider the cover position. Where necessary, the Club can assist Members arranging additional cover.  

   The Club has recently published a helpful FAQs on the subject of Deviation: Steamship Mutual - Deviation - FAQs

4. Operational Risks in a Limited‑Fuel Environment

   From an operational perspective, Members will need to remain mindful of a range of risks as the Conflict persists and compliant marine fuel availability becomes increasingly constrained. These include longer waiting times for marine fuel stems (and for the operations themselves), extended routing to alternative bunkering ports, and the potential for performance disputes relating to speed and fuel consumption.  

   Marine fuel scarcity is likely to increase the risk of quality and compatibility issues, placing greater emphasis on the need for robust marine fuel procurement procedures, including thorough sampling and testing, in order to avoid or mitigate adverse consequences. In practical terms, Members should seek to source marine fuel from reputable suppliers, ensure that marine fuel specifications are clearly agreed and properly documented, retain representative samples, and ensure analysis testing is conducted prior to consuming the marine fuel.  

   Where there is a widespread trend towards the use of non‑compliant marine fuels in any particular region, Owners can expect heightened regulatory scrutiny. In such circumstances, early engagement with Charterers, suppliers and relevant authorities, together with prompt notification of any difficulties in sourcing compliant marine fuel and the maintenance of clear, contemporaneous documentary records, will be essential to mitigating both regulatory and contractual risk.

Conclusion

While a tentative ceasefire has been announced in recent days, it remains inherently fragile, and following the breakdown of peace talks, we have already seen escalatory rhetoric from both sides. The Conflict is already exerting significant pressure on the marine fuel supply chain, and any continued closure of the Strait of Hormuz now risks precipitating an unprecedented disruption to the availability of marine fuels. Such disruption would have far-reaching consequences for contractual risk allocation, operational decision-making, and regulatory compliance. These risks would be materially exacerbated should Iran-aligned Houthi forces follow through on their stated intention to restrict access to the Red Sea by blockading the Bab el Mandeb Strait.

Charterparties are likely to be tested across a range of familiar but increasingly contentious issues, including seaworthiness, performance, deviation, and bunkering risk. In a rapidly evolving and highly uncertain operating environment, Owners and Charterers should take proactive steps to protect their positions by:

• Enhancing cooperation and information sharing, with early and ongoing engagement between the Master, Owners, Charterers, and marine fuel brokers where appropriate;
• Maintaining robust and well documented voyage planning and marine fuel calculation procedures;
• Strengthening marine fuel sampling, testing, and compatibility safeguards;
• Preserving comprehensive contemporaneous evidence where disruption impacts marine fuel procurement or performance; and
• Considering pre-emptive contractual amendments or addenda, such as liberty, deviation, or slow-steaming provisions.

Proactive risk management, supported by disciplined planning and comprehensive documentation, will be critical in mitigating disputes and navigating the months ahead.  

As ever, the Club remain on hand to assist and would urge Members to notify us as early as possible when issues arise.