Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulphur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in from the start of January.
The new International Maritime Organization (IMO) rules prohibit ships from using fuels containing more than 0.5% sulphur, compared with 3.5% through the end of December, unless they are equipped with exhaust-cleaning "scrubbers".
The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers.
In Europe, for example, Marine fuel supplier Peninsula Petroleum plans to double VLSFO deliveries to 600,000 tonnes by year-end in Europe and the Americas.
Gunvor Group will overhaul its refinery in Rotterdam in March to produce LSFO.