Fuel Oil

Heavy residual oil from the bottom of the barrel, burned in ships, power plants and industry.

Overview

Residual fuel oil is the heavy remainder of crude refining, sold in grades by viscosity and sulfur content. Shipping is the largest market, with Singapore, Rotterdam and Fujairah as the main bunkering hubs. The International Maritime Organization cut the global sulfur cap on marine fuel from 3.5 percent to 0.5 percent in January 2020, a rule known as IMO 2020 that reshaped refinery output, widened the discount on high sulfur fuel oil, and pushed shipowners to install exhaust scrubbers. Utilities in some Middle East and Asian countries still burn fuel oil for power during peak summer demand. Prices trade as cracks against crude, and the spread between high and low sulfur grades is a closely watched gauge.