BAKU, Azerbaijan, Oct. 23
By Leman Zeynalova - Trend:
The new regulations of the International Maritime Organization (IMO) to reduce the sulphur level in engine emissions will not have much impact on the key markers like Brent, Trend reports citing Wood Mackenzie research and consulting company.
“We’d expect the differentials for Dubai/Brent to blow out from a recent discount of US$1/bbl to over US$3/bbl. Sweeter crudes can expect a premium to Brent,” said the company.
As for refiners, Wood Mackenzie said shipping consumes 3.5 million b/d of high-sulphur fuel oil (HSFO, sulphur content capped at 3.5 percent).
“Refiners globally will be able to deliver 1.5 million b/d of VLSFO (very-low sulphur fuel oil, capped at 0.5 percent) by our reckoning. HSFO demand will be sustained by those vessels that have invested in scrubbers, as well as some non-compliance (estimated at around 10 percent in 2020). While this includes some shippers that are prepared to cheat, (particularly in markets with more limited port state control inspections), non-availability and non-compatibility of VLSFO could also lead to some shippers continuing to use HSFO in the initial period of implementation. That leaves around 1 million b/d looking for marine gasoil (similar to diesel) which is more expensive – so shippers will pay more for their fuel,” said the company.
The International Maritime Organization (IMO), the industry’s regulator, will require all ships to reduce the level of sulphur in their engine emissions from 3.5 percent currently to 0.5 percent or less from 1st January 2020.
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