Changes in marine fuel sulfur limits will put temporary upward pressure on diesel margins

Changes in marine fuel sulfur limits will put temporary upward pressure on diesel margins
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15.01.2019

The January 2019 Short-Term Energy Outlook (STEO), released at noon today, for the first time includes analysis of the effect that upcoming changes to marine fuel sulfur specifications will have on crude oil and petroleum product markets. Beginning January 1, 2020, the International Maritime Organization’s (IMO) new regulations limit the sulfur content in marine fuels used by ocean-going vessels to 0.5% by volume, a reduction from the previous limit of 3.5%. The change in fuel specification is expected to put upward pressure on diesel margins and modest upward pressure on crude oil prices in late 2019 and early 2020. EIA’s analysis indicates that the price effects that result from implementing this new standard will be most acute in 2020 and will diminish over time.

Full article at eia.gov

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