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IEA: Sulfur cap will have short-lived impact on distillate market

The global sulfur cap will boost distillate demand significantly in 2020. But this effect will be short-lived, notes the IEA in a new report.

Photo: /ritzau/Michael Hansen

When the global fleet is barred from sailing on fuel with sulfur content exceeding 0.5 percent, the demand for distillate will increase significantly – but the sharp increase in 2020 will quickly flatten out, says the International Energy Agency (IEA), according to Reuters.

With the implementation of the upcoming sulfur cap, consumption of gas oil is expected to surge by a million barrels per day, according to estimates, and a majority of shipping companies are at this point expected to opt for this solution. Only a few companies have by now installed scrubbers or prepped vessels to sail on LNG, both of which represent other means of complying with the sulfur directive.

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