Ship refuelling at Fujairah, a major bunkering hub in the United Arab Emirates, has slowed after a fire, market sources told Reuters, while demand at other refuelling hubs, including Singapore, is set to rise.

Some bunker deliveries and loadings were on hold for now as suppliers, traders and shippers await more clarity on the situation, while others said that bunkering is still possible.

The fire was caused by debris after the interception of a drone by air defenses, according to the Fujairah media office, amid the U.S.-Israel conflict with Iran.

Oil storage firm Vopak said on Wednesday it has temporarily suspended vessel loading operations at its Fujairah terminal following a fire, while the terminal remains operational. VTTI said on Tuesday that it suspended operations at its terminal.

The U.S.-Iran conflict had disrupted fuel shipments in the region, spurring a jump in prices at Fujairah on Monday, and potentially shifting demand to other ports including Singapore.

Transit through the Strait of Hormuz between Iran and Oman, which carries around one-fifth of oil consumed globally as well as large quantities of liquefied natural gas, has ground to a near-halt after some vessels in the area were hit.

Bunkering continues at the port, but sales were largely stalled after marine fuel offers jumped on Monday on concerns of prolonged supply disruption, Dubai-based market sources said.

Fujairah sits on the east coast of the United Arab Emirates near the entrance to the Strait of Hormuz.

Low-sulphur marine fuel offers at the port rose to premiums of more than $30 per metric ton to Singapore fuel oil quotes from $10–$15 last week, sources said, while high-sulphur fuel shifted to premiums from discounts.

Demand to Firm in Other Hubs

With consumption slowing in Fujairah, traders expect demand to shift to other hubs in Asia, Rotterdam, the Mediterranean, Colombo and India if tankers avoid the Middle East or vessels remain stranded in the Gulf.

Spot demand at the world's largest bunkering port Singapore was already brisk late on Monday as shipowners sought to secure fuel before prices rise further, suppliers and traders said.

"Demand will surge in the following weeks if the war continues and premiums will definitely follow due to the disruption in supply," one of them said.

The sources declined to be named as they were not authorised to speak to the media.

Prices and margins for high-sulphur fuel oil in Asia rose sharply on Monday after Brent crude futures LCOc1 jumped. O/R

"Current shipper caution means a gridlock on Strait of Hormuz transited volumes for now, and extended disruptions will curtail bunker fuel supply in Singapore," said Royston Huan, a senior oil products analyst at consultancy Energy Aspects.

(Reuters - Reporting by Jeslyn Lerh in Singapore and Enes Tunagur in London; Additional reporting by Anushree Mukherjee in Bengaluru and Sarah El Safty in Dubai; Editing by Florence Tan, Nivedita Bhattacharjee and Louise Heavens)