The criticality of shipping operations in global trade requires a comprehensive understanding of its sustainability. This depends on the integrity/performance of the ship structure and vital systems, such as the ship propulsion engine. The current research paper presents the application of an adaptive machine learning formalism, the Bayesian network, for failure assessment of a ship propulsion engine considering nonlinear and nonsequential failure interactions. The model captures critical failure influencing factors and their complex interactions to predict the failure probability of the ship energy system. Sensitivity and uncertainty analysis was carried out to establish the degree of influence of vital failure influencing factors as they affect the ship propulsion engine’s reliability and the associated uncertainty in the prior data processing. The model is tested on the propulsion engine of an ocean going vessel to forecast the likelihood of failure based on the logical dependencies among failure causative factors. Two scenarios were analyzed based on canonical probabilistic algorithms, and the results show that upon evidence on the three critical failure modes, the ship propulsion engine failure likelihood increased by 11.8%, 8.2%, and 9.4%, respectively. The model shows an adaptive/dynamic capability to capture new failure information and update the system’s failure probability. The proposed approach provides a condition monitoring tool and early warning guide for integrity management of critical ship energy systems.