World News
Non-Compliance and Waivers Bigger Drivers for Post-2020 Fuel Oil Demand Than Scrubbers: ESAI
ESAI Energy LLC (ESAI) today suggested that non-compliance and waivers will play a bigger role than scrubbers in driving post-2020 fuel oil demand.
"If implemented as currently planned, the regulations will destroy 1.2 million b/d of fuel oil demand and create a similar amount of marine gasoil demand," said ESAI.
"Despite a steep reduction in fuel oil demand, non-compliance, waivers, and to a lesser extent the adoption of exhaust scrubbers, will drive the continued consumption of large volumes of high sulfur bunker fuel oil in the years after 2020."
The comments came as part of an ESAI assessment of the implementation of the International Marine Organization's (IMO) global 0.50 percent cap on sulfur in marine fuels, slated to take effect in 2020.
ESAI Energy Analyst, Chris Cote says the new IMO regulation “will turn the bunker fuel oil market on its head in 2020.”
The agency says the new rules will also be a "major boost" to diesel markets, particularly in Asia and Europe, in the face of slowing inland diesel demand growth over the next five years.
Stephen George, Chief Economist at energy consultancy KBC, recently told Ship & Bunker that the response to 2020 by European refiner's was particularly problematic due to concerns about the durability of demand for product from land-based sectors.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 504.50 | 2.50 | 620.00 | 3.00 |
| Rotterdam | 456.00 | 1.50 | 621.50 | 2.00 |
| Houston | 476.00 | 7.00 | 624.00 | 1.00 |
| Fujairah | 496.50 | 2.00 | 713.00 | 2.50 |
| Global 20 Ports Average | 526.50 | 0.50 | 712.00 | 0.50 |
| Global 4 Ports Average | 483.00 | 2.00 | 644.50 | 0.50 |
| Global Average Bunker Price | 570.50 | 1.50 | 751.00 | 1.00 |
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