Multi-client studies

Multi-client studies are special single-issue reports that dig deeply into a particular topic. These publications provide a comprehensive view on a given issue facing energy markets. They draw on a wealth of data and analysis to provide these detailed insights, usually accompanied by an opportunity for clients to engage directly with the analysts responsible for the study.

Vision 2020 is a deep-dive report into the IMO 2020 transition, with a focus on the small details that will have important ramifications for global oil markets.

While the IMO’s rules represent a significant tightening of fuel oil specifications, which will challenge the viability of many simple refineries, particularly in the Atlantic basin, they are also an unprecedented loosening of global diesel standards.

From H2 19, a new, global market for high-density, high-sulphur gasoil will emerge. From being a niche product, marine gasoil will emerge as a viable product for large-scale production, enabling refiners to shift high-density gasoil material out of the fuel oil pool or conversion units directly into the diesel blending pool. At the same time, ship owners’ demands for cheaper, energy-dense fuels will spur the evolution of new very low sulphur fuel oil (VLSFO) blends, that will provide a new outlet for VGO, LCO and other components that today must undergo secondary processing before becoming marketable fuels.

Producing these fuels in the quantities that will be required by the marine sector is technically feasible for the world’s refineries. Indeed, the greatest challenge arising from IMO 2020 will not be meeting marine sector demand for clean fuels alongside traditional demand sources. Rather, it will be the need to rationalise HSFO production.

While power generation has been touted as an outlet for the world’s surplus HSFO, this market is limited and the net gain for oil demand from power generation from IMO 2020 is likely to be small, particularly if LSFO is pulled out of utility applications to meet marine sector demand. Indeed, even the cost of meeting utility-grade viscosity requirements is likely to rise sharply given the revaluation of heavy gasoil streams that will occur because of the emergence of the new MGO/VLSFO pool.

The implications of IMO 2020 are therefore that most refiners will be obliged to shift product or crude slates to reduce their exposure to the HSFO market, with significant implications for global crude oil flows and the relative value of sweet and sour crudes. Indeed, our analysis points to a new paradigm for valuing sour crudes based on the sulphur content of residual fractions.

These issues and more are explored in our multi-client study, Vision 2020, that was released on Friday 30 November 2018 and is now available for immediate purchase.

Along with this multi-client study, we will hold a workshop on Wednesday 27 February 2019 in London to present and discuss our findings with those who subscribe to this report.

Please contact to order this multi-client study and to secure your seat at the workshop now.