Shipping torched $95bn on fuel in nine months of Hormuz chaos

Shipping has burned an estimated $95bn in extra fuel costs since the Strait of Hormuz crisis began in late February. Gavin Allwright, secretary-general of the International Windship Association (IWSA), calls it a "fossil fuel bonfire" — and his maths is blunt.

In March alone, spiking fuel prices drained an extra $340m a day from the industry. The global average price of VLSFO surged from $500 to $810 per tonne, with other fuels rising even higher. The monthly fuel bill for the sector jumped from $12.5bn to well over $20bn.

That is roughly eight times the $11bn-$12bn fund negotiators are haggling over at the IMO this December for the Net-Zero Framework. One side of that comparison was voluntary policy. The other was simply the invoice for staying dependent on oil.

What could $95bn have bought?

Allwright's counterfactual is wind propulsion — retrofit systems that tap a fuel delivered free at the point of use. The numbers stack up like this:

• 100,000 to 200,000 wind-assist retrofit systems, enough to equip half the current global merchant fleet
• A 5% cut in fleet-wide fuel consumption
• 45m tonnes of CO2e eliminated every year

Because the wind itself costs nothing, those savings would keep compounding. Allwright estimates the retrofits would unlock a further $12bn annually — enough capital to fund up to 20,000 additional systems per year. By 2040, he argues, the deployment cycle would have fully paid for itself, returning the original $95bn to shipowners' pockets for further decarbonisation.

The alternative route is newbuilds. The same money could have financed 5,000 to 10,000 primary-wind vessels, cutting fuel use and emissions by up to 80% per ship.

What does this change for shipowners?

In the immediate term, nothing — the billions are gone. "We cannot recover the billions already burned, but we can stop the bleeding," Allwright writes. The commercial argument he's making is about the next cycle: every dollar handed to fossil fuel suppliers buys no long-term energy security and no commercial resilience. Every dollar spent on wind-assist hardware buys a permanent hedge against exactly the kind of price shock the industry just absorbed.

The opportunity-cost framing extends beyond hardware. Allwright points out the same evaporated capital could have:

• Financed retraining for the 600,000 seafarers who will need to operate alternative technologies and new fuels by the mid-2030s
• Covered the initial $300m-$500m needed by the Pacific Blue Shipping Partnership to deliver dozens of primary-wind ships to Pacific islands
• Funded similar programmes globally, weaning vulnerable economies off expensive fossil fuel imports

December's decision

The IMO's Net-Zero Framework comes up for adoption again in London this December. Allwright, writing in an opinion piece for Splash, argues it would "catalyse the rapid scaling of wind technology and help break the cycle" of fossil-driven cost spikes.

His underlying claim is that the geopolitical crises have exposed the true price of climate inaction. A sector that balks at an $11bn-$12bn decarbonisation fund while quietly paying $95bn in fuel premiums is, in his reading, not so much managing risk as renting it.

It's an advocacy's numbers, so treat the fleet-wide retrofit maths with the usual care. But the direction of the argument holds regardless: fuel price volatility has already cost shipping more this year than the entire policy package under debate. The December vote will show whether negotiators price that lesson in.