residual fuel oil

The planned shift from 3.5%-sulfur marine fuel to fuel with sulfur content of 0.5% or less mandated by IMO 2020 on January 1, 2020, will require a combination of fuel-oil blending, crude-slate changes, refinery upgrades and, potentially, increased refinery runs, not to mention ship-mounted “scrubbers” for those who want to continue burning higher-sulfur bunker. That’s a lot of stars to align, and even then, there’s likely to be at least some degree of non-compliance, at least for a while. So, what’s ahead for global crude oil and bunker-fuel markets — and for refiners in the U.S. and elsewhere — in the coming months? Today, we continue our analysis of how sharply rising demand for low-sulfur marine fuel might affect crude flows, crude slates and a whole lot more.

The US has more refining capacity than any other country (17MMb/d) and nowhere are refineries as sophisticated. In the past two years US refineries in the Midwest region have been running close to full capacity and refineries in the Gulf Coast region have led a refined product export boom. At the same time, refineries on the East Coast have been shuttered or saved only by a combination of last-minute deal-making and government subsidies. What makes one refinery better than another? Today we walk through the first distillation process in a complex refinery.