Battle between high- and low-sulphur fuels shaping up

ON JAN 1, 2020, new global sulphur specifications for bunker fuel from the International Marine Organization (IMO) tightened from a maximum of 3.5 per cent to 0.5 per cent.

While the shipping and refining industries had adjusted ahead of January's implementation deadline, there were a few surprises - especially given the industry has never attempted such an abrupt global-scale transition. Other surprises came from weather and the impact of the current coronavirus outbreak.

Singapore, as the world's largest bunker trading hub, sits at the heart of a 300-million-metric-ton-per-year market. The mandated IMO transition to comply with 0.5 per cent sulphur emission is going mostly as expected, with low-sulphur fuels pricing much higher than high-sulphur ones.