West African countries look likely to be big winners from the IMO 2020 fuel rule changes.
Countries such as Chad and Cameroon have the right type of sweet, heavy crude to produce low-sulphur fuel oil.
About 75% of the world’s exports of heavy sweet crude, which has a less than 0.5% sulphur content, come mainly from Angola, Chad and Cameroon.
“The new environmental regulation starts in January, but preparation has already begun. Refiners need to ready their supply streams and learn how to best prepare for a low-sulphur future,” Josh Lowell, senior energy analyst at ClipperData, told Reuters.
“Even though trading houses and refiners are keeping their strategy and timing close to their chest, it’s clear certain West African grades really stand to benefit.”
Prices are rising already. Chad's oil has jumped to 75 cents above Dated Brent this month from 60 cents below at the beginning of 2018, while Angola's crude has risen from a 60 cent discount to a $2.50 premium over the same period.
