Insight for Developments

Brickstone_Low Sulfur Fuel Oil

Download Whitepaper : Potential of Low Sulfur Fuel Oil (LSFO) Projects

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Low Sulfur Fuel Oil has been in the news since 2016 when the International Maritime Organization (IMO) decided to strictly enforce the use of bunker fuels with a sulphur content of 0.5% (mass by mass) from the existing 3.5% limit, from 2020.

The implementation of IMO 2020 could lead to the disappearing of substantial quantities of HSFO used by the shipping industry and the introduction of Low Sulfur Heavy Oil. The surge in ultra-low sulphur fuel oil (ULSFO) demand may put pressure on the refineries to increase capacity utilisation of coker, residue fluid catalytic cracker and hydrocracker units. On the other hand, a reduction in demand for HSFO could affect their revenues.

Simple refineries, having access to ultra-sweet crude from coasts of West Africa and US shales, can ramp-up their Ultra Low Sulfur Fuel Oil (ULSFO) production and reduce the supply-demand gap. Many complex refineries, in countries such as China and the US, are also changing their existing refinery configurations for increasing production of IMO 2020 compliant fuels. New refining capacities, which are expected to come online primarily in Asia and the Middle East, are well-positioned to process high-sulphur fuels into IMO 2020 compliant fuels.

In the near future, there would be a huge demand supply gap for low sulphur fuel oil (LSFO) once the IMO 2020 is implemented

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