January 16, 2020 / 10:37 AM / 3 days ago

Supplies of IMO compliant shipping fuels rising fast: IEA

FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo

LONDON (Reuters) - Global supplies of marine fuel compliant with new environmental rules are increasing fast as concerns over quality remain marginal, the International Energy Agency said on Thursday.

International Maritime Organization (IMO) rules that took effect on Jan. 1 require ships to use fuels with sulphur content of no more than 0.5%, down from 3.5% before, unless they are equipped with exhaust-cleaning systems known as scrubbers.

Despite initial concerns late last year about availability of very low-sulphur fuel oil (VLSFO), the preferred compliant marine fuel, supplies at key hubs now seem adequate, the global energy watchdog said in its monthly report. [IEA/M]

“We are starting to see the first data on the transition and, it appears that deliveries of the new VLSFO bunkers are increasing fast,” the IEA said.

Concerns that the VLSFO, which is a blend of high-sulphur and low-sulphur fuel, could damage engines are less prominent, the IEA said.

The strong demand for VLSFO has led to a sharp increase in its price in recent months which sharply narrowed its spread with the more expensive marine gasoil (MGO).

Refiners around the world have responded by boosting VLSFO production.

Reporting by Ron Bousso; editing by Emelia Sithole-Matarise

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