Global Low Sulfur Fuel Oil Market: Snapshot
The low sulfur oil market has been recently witnessing massive impetus from the changing regulations in the marine industry. The recent impetus is spearheaded by momentum generated from New International Maritime Organization (IMO) regulations that calls for slashing the highest percentage of the sulfur marine fuels can contain. The norms will kick in in the next year that is in 2020. This has now started to stir the shipping industry to transition to low-sulfur fuel oil. Undoubtedly, the industry has remained as the biggest contributor of sulfur to the environment, accentuating the risk of sulfur dioxide in the atmosphere. Sulfur dioxide exposure is associated with adverse health concerns. Seemingly, the implementation of regulations will pave way to an era of low-sulfur and will likely cause upheaval in the industry in the not-so-distant future. Rapid advances have been made in marine fuel blending technology. This will enable the shipping industry worldwide to make the transition faster. Growing numbers of trails that have successfully trained sea and shore staff on understanding the properties of low sulfur fuel oil will open new trends supporting the expansion of the market.
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Post the regulations drafting, there has been an air of uncertainly in fuel prices for the marine industry. This has led to a growing number of futures contracts among shipping and energy firms, especially in developed nations. This has spurred trade activities in low-sulfur marine fuel, thus boosting the prospects in the low sulfur oil market. The shift toward cleaner fuels is one of the key drivers for the market. The marine industry is becoming increasingly aware about the ways that can help it contribute to reducing air pollution. Growing focus of countries that are considered as oil trading hub is expanding the potential in the market considerably. A case in point is low-sulfur marine fuel trade supported by developed Asian countries.
Low Sulfur Fuel Oil Market: Overview
Residential heating oil is also referred to as fuel oil. It is a middle distillate petroleum product and is similar to jet fuel and kerosene. In the past few years, fuel oil and diesel were considered to be identical. The same refined petroleum product was procured andsold through gas stations as highway fuel and as heating oil by dealers.In the present scenario, residential heating oil is considered to be different from highway fuel for two main reasons: firstly, in 1990s, the U.S. Environmental Protection Agency (EPA) has passed a regulation that diesel oil used for transportation purpose should have a sulfur content of less than 500 parts per million. However,for heating oil, sulfur content was kept in the range of 2,000 ppm to 2,500 ppm. Further,the highway fuels are taxed on per unit price by both federal and state governments, in order to raise revenue and to provide funding for highway trust funds. Since heating oil is not taxed on the same lines as that of highway fuel, it is dyed in cranberry red color to differentiate it from highway fuel.
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