LONDON — European diesel refining profit margins have tumbled as a slowing global economy has hit fuel demand harder than forecast despite expectations of a boost from new fuel shipping rules. Refiners have raced to produce more low-sulphur fuel to meet the new standards set by the International Maritime Organization (IMO), known as IMO 2020, that take effect on Jan. 1. The rules require ships to use cleaner fuels, such as very low sulphur fuel oil (VLSFO) and marine gasoil (MGO), or to install equipment known as "scrubbers" to ensure they pump out less sulphur oxide pollutants. But instead of the switch causing a demand spike and boosting returns for makers of diesel, which is used as a blending stock for low sulphur marine fuels, inventories are now bigger than expected and margins are under pressure.

Source: International New York Times December 11, 2019 07:07 UTC