Shipping fuel change to upend refining
London
A SWITCH to cleaner fuels in the world's ships in 2020 could double the profits of the world's most advanced oil refineries - but threatens to put older ones out of business and punish those countries, including prominent Opec members, that produce the wrong kind of crude.
In less than four years, ships worldwide will have to cut their sulphur emissions to 0.5 per cent from 3.5 per cent now.
Many had expected a five-year extension, but the now on-target deadline has floored some ship owners and refiners, and left a scramble to determine what to use in vessel engines - and what to do with the some 3 million barrels per day (bpd) of sulphur-laden fuel oil that powers most ships today.
It is effectively a windfall for advanced refineries, which produce larger amounts of the low sulphur fuel that many ships will use, but is an ominous signal for others, including countries such as Saudi Arabia, Iraq, Venezuela, Mexico and Brazil that produce oil with high amounts of sulphur. "That is going to increase the advantage that we have over time," Thomas Nimbley, chief executive of PBF, which owns five refineries in the United States, said of the ch…
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