New IMO Regulations Lead to New Fuel Mixes

Following the introduction of IMO regulations designed to curb emissions within the maritime industry, the market has been flooded with new very low-sulphur fuel oil (VLSFO) mixes. The rules have drastically reduced the permitted level of sulphur in marine fuels to a maximum of 0.5% in a bid to reduce the industry's environmental footprint. In response, shipping lines have started to favour very low-sulphur fuel oil (VLSFO) mixes over conventional distillate fuels such as marine gasoil, which also meets the new sulphur requirements.

Leading oil and gas companies such as Total have already launched several blends of VLSFO that meet the new IMO regulations, with shipping companies quick to guzzle them up. The company has confirmed it will be offering VLSFO blends at all major ports, including hubs in China, France and Singapore.

"With our great expertise in fuel oil blending, Total has already designed several blends of VLSFO that are compliant to the new regulations and ISO 8217," reads a statement on the Total website.

VLSFO blends offer similar performance to existing high-sulphur bunkers and are made with low sulphur crudes to minimise sulphur residue. Most of the low sulphur crude used to produce VLSFO blends will come from North Africa, West Africa and Southeast Asia.

Price difference between VLSFO and distillate fuels narrows

As a result, the price difference between VLSFO mixes and distillate fuels has significantly narrowed at ports around the world. In Singapore, one of the largest bunkering ports in the world, the price difference between VLSFO and marine gasoil was negligible, with S&P Global Platts assessments reporting both options were selling at around US$650 a tonne.

“Shipowners have shown a clear preference for VLSFO-type fuels over MGO, probably due to viscosity and other factors, so the rise in VLSFO relative to diesel effectively permits blending a wider range of heavy components into VLSFO blends,” comments Robert Campbell, head of oil products at Energy Aspects, a global market research consultancy.

For many maritime companies, especially those operating larger vessels, VLSFO is strongly favoured over MGO due to the technical issues that can often arise when using distillate fuels. In comparison, heavy fuels are far more reliable which has led to an increase in demand for VLSFO mixes. Encountering an engine failure while at sea in challenging weather can be incredibly dangerous, which has made VLSFO mixes the fuel of choice for many companies.

For more information on the latest techniques being used to monitor fuel content and quality, 'Sulphur analysis in aromatic and Naphtha hydrocarbon stream of petroleum products and crude oil' offers fascinating insight.