“The single largest oil market disruptor”—as some experts and media have dubbed the new shipping fuel rules set to kick in in less than two months—has had refiners on edge this year as they prepare for the dramatic switch in marine fuel specifications. The refining industry around the world has carefully planned to boost compliant fuel production in the back end of the year, expecting windfall from the IMO-effect in the months immediately preceding the shipping rules change. But as January 1, 2020, is fast approaching, the previously expected refining margins bonanza could turn to bust as the disruption is now expected to be much less dramatic than previously thought. According to the new rules by the International Maritime Organization (IMO), only 0.5-percent or lower sulfur fuel oil should be used on ships beginning January 1, 2020, unless said ships have installed the so-called scrubbers—systems that remove sulfur from exhaust gas emitted by bunkers—so they can continue to use high-sulfur fuel oil (HSFO). To be sure, the new fuel specifications are set to send shockwaves through the entire supply chain in the shipping industry—from crude oil producers, to refiners, to traders, to shippers, to end-consumers of everything traded on […]
