10JUN2019 - NEWS - Ship fuel change becomes refiner gamble as heavy crude dwindles

A change in ship fuel that seemed like a sure profit churner for sophisticated refiners a year ago isn’t a clear winner now. When the International Maritime Organisation imposed clean-fuel rules for ships starting in 2020, the popular outlook was that thicker, dirtier crude would plummet in price, as it yields more of the high-sulphur fuel oil that can’t be burned unless ships have special equipment to scrub their emissions. Diesel prices would surge as vessel owners use it as a substitute.
But sanctions on Iran and Venezuela, supply cuts by Opec and its allies, contaminated oil from Russia and a lack of pipelines from Western Canada have combined to push up heavy crude prices just as refiners are gearing up to produce the cleaner fuel. That’s slashed the margins for the refiners able to turn the dirtiest crude into clean fuel, who appeared to be in line for a big payday.

Published by Editor - www.Livebunkers.com at 10-Jun-2019 03:45:46 [UTC] , contact editor at editor@livebunkers.com