The International Marine Organization's (IMO) sulphur cap mandate could lead to distillate prices of over $1,000 a metric tonne in 2020, according to a supplemental study by EnSys Energy and Navigistics Consulting. It predicts that low-sulphur fuel demand will be higher than anticipated due to limited availability and a low uptake of scrubbers, leading to a "scramble period" in which less complex refineries bid up the cost of light sweet crude. Refiners are also concerned about the impact on their bottom lines.
The International Marine Organization's (IMO) sulphur cap mandate could lead to distillate prices of over $1,000 a metric tonne in 2020, according to a supplemental study by EnSys Energy and Navigistics Consulting. It predicts that low-sulphur fuel demand will be higher than anticipated due to limited availability and a low uptake of scrubbers, leading to a "scramble period" in which less complex refineries bid up the cost of light sweet crude. At issue is that four million bpd of high sulphur fuel will need to be converted, but capacity to produce only three million will exist in H1 of 2020.