rss icon Subscribe
desktop mobile

U.S. Scoops up Overseas Fuel Oil in pre-IMO Push

file Image / AdobeStock / © mikes jc

The United States is taking advantage of record-low prices of one of the world's dirtiest fuels by buying record volumes, which it intends to upgrade 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 countries such as Russia, boosting imports of the product into the United States.

This comes even as prices for high-sulphur fuel oil (HSFO) on the U.S. Gulf Coast trend lower while demand for high-sulphur fuels sags globally.

Fuel oil in the region traded at $41.56 per barrel on Nov. 6, a three-year seasonal low, data from S&P Global Platts shows.

Fuel oil prices in Europe have also fallen to record lows, which has helped make exports to the United States economical.

According to data from oil analytics firm Vortexa, U.S. imports of fuel oil from Russia and former Soviet Union (FSU) countries surged to at least a multi-year high of 1.35 million tonnes in October, and they are expected to hold firm at similar levels in November.

"The broader rise in FSU-U.S. flows since the beginning of this year has therefore helped to offset the impact of the collapse in Venezuelan fuel oil imports in the wake of U.S.-led sanctions," Vortexa said.

Vortexa separately noted that the United States had received fuel oil from Jordan at the end of October, with another tanker set to arrive around the end of November. The route from Jordan to the United States is unusual, Vortexa said.

New regulations on marine fuel by the International Maritime Organization that take effect on Jan. 1 will restrict sulphur content in shipping fuels to a maximum 0.5%, from 3.5% now.

Complex U.S. refiners have long been expected to benefit from the new regulations because they have greater capability to break down cheaper, heavy crudes into higher-margin, compliant products.

They have vacuum distillation capacity to break down straight-run fuel oil, which comes directly from a crude unit, as well as coking capacity, which upgrades cracked fuel oil, a by-product from complex refining methods.

The increased imports may be related to U.S. refiners looking to run fuel oil directly to their cokers as the price of high-sulphur fuel oil declines ahead of IMO 2020, said Sandy Fielden, energy analyst at financial services firm Morningstar.

"If fuel oil is a good deal cheaper than crude, you can run it direct to the coker to produce gasoline and diesel and increase refinery returns," Fielden said.

"If it proves profitable then we should see more of it in the coming months as HSFO prices fall."

By Ahmad Ghaddar and Stephanie Kelly

Nov 8, 2019



Sovcomflot, Total Ink Timecharter Deal on LNG Transport

Igor Tonkovidov, President and CEO of PAO Sovcomflot at the signing. Photo courtesy Sovcomflot.

PAO Sovcomflot (SCF Group) and Total have concluded a time charter agreement for up to seven years

US Blacklists Tankers, Oil Traders Undermining Venezuela Sanctions

© Yevgeniy B. /

The United States on Tuesday sanctioned a network of oil trading firms, individuals and vessels

GTT Wins LNG Carrier Tank Design Order from Samsung

French engineering firm GTT said it has received an order from the Korean shipyard Samsung Heavy Industries (SHI) for the tank design of a new 174,000-cubic-meter-capacity

Environmental; Fuel

Jan De Nul Dredger Arrives in Belgium

Photo: Jan De Nul

Jan De Nul Group’s newest Trailing Suction Hopper Dredger Sanderus has just arrived in Belgium to

SAL Heavy Lift Taps Inatech to Navigate IMO 2020

Photo courtesy of SAL Heavy Lift

German fleet operator SAL Heavy Lift has hired Inatech, a unit of Glencore, to ensure compliance

ABS Grants AIP to KHI's LPG System

ABS, a global provider of classification and technical advisory services to the marine and offshore industries, has granted Approval in Principle (AIP) to Kawasaki Heavy

Maritime Apps