The U.S. is profiting from record-low prices of one of many world’s dirtiest fuels by buying record volumes, which it plans to improve into cleaner products before new shipping rules take effect, trading, and analyst sources say.
U.S. trade sources said it recently had become economical to ship fuel oil from nations comparable to Russia, boosting imports of the product into the U.S.
This comes even as prices for high-sulfur fuel oil (HSFO) on the U.S. Gulf Coast trend lower, whereas demand for high-sulfur fuel falls worldwide.
Fuel oil in the area traded at $41.56 per barrel on Nov. 6, a three-year seasonal low, information from S&P Global Platts reveals.
Fuel oil prices in Europe have further fallen to record lows, which has helped make exports to the U.S. economical.
Based on data from oil analytics agency Vortexa, U.S. imports of fuel oil from Russia and former Soviet Union (FSU) nations plummeted to at least a multi-year high of 1.35 million tonnes last month, and they’re anticipated to carry firm at similar stages this month.
Vortexa individually noted that the U.S. had acquired fuel oil from Jordan at the end of October, with another tanker set to reach around the end of November. The route from Jordan to the U.S. is unusual, Vortexa stated.
New regulations on marine fuel by the International Maritime Group that take effect on Jan. 1 will restrict sulfur content in delivery fuels to a maximum of 0.5%, from 3.5% now.
Complex U.S. refiners have long been anticipated to take advantage of the new rules because they’ve more excellent capability to break down cheaper, heavy crudes into higher-margin, compliant products.