According to the report of today's oil price on December 20, according to Reuters, the freight rate of aframax crude oil tankers on the Gulf coast of the United States set a new record in the week ending December 20, due to the increased demand for US crude oil to Europe and the Mediterranean before the new rules of the International Maritime Organization (IMO) in 2020, which will come into force only two weeks later.
last week, an aframax tanker cost $46800 a day worldwide. But equinor and unipec hired aframax tankers this week for $60700 a day, up nearly 30% in just a week. The cost was spread over 700000 barrels of oil held by the aframax tanker.
In the past few weeks, European demand for light, low sulfur crude oil has increased as new maritime regulations (i.e. IMO 2020) will limit the amount of sulfur allowed in fuel burned by maritime vessels. The surge in demand has limited the number of aframax tankers available, thus increasing the cost of transporting IMO 2020 compliant oil. According to analysts and ship brokers interviewed by Reuters, this demand may increase the daily oil export volume of the United States to 4 million barrels, which will be a new high for the United States.
According to the EIA, the daily export volume of crude oil in the United States has increased from an average of 2.065 million barrels a day at the beginning of the year to 3.633 million barrels today.
According to Bloomberg, although the international maritime organization is expected to increase the demand for low sulfur crude oil in 2020, not everyone agrees with the new rules, including Mexico and Thailand, and not every country signing the rules will fully comply with the rules from the beginning.
According to the new IMO rules, ships can only use fuel with sulfur content of 0.5%, which is lower than the current maximum allowable sulfur content of 3.5%. If the ship is equipped with a scrubber that can capture most of the sulfur in the fuel, the high sulfur fuel can continue to be used.