IMO 2020 LSFO Complications – Potential Long Term Positive for Heavy Differentials
Following the implementation of IMO 2020, there is evidence of multiple complications globally related to very low sulfur fuel oils (VLSFO). Recently, red alerts have been issued from VLCC owners specifically flagging the sediment, high catalyst fines, high calcium content, and wax formation as significant risks with VLSFO currently on the market. These quality complications coupled with a growing price differential could push market participants that have the option to use high-sulfur fuel oil (HSFO) with scrubbers in the future.