Shipping contributes to about 10% of man-made sulfur oxide emissions. 80% of the world global trade by volume is by sea freight with over 50,000 merchant vessels.

In October 2016, the International Marine Organization (IMO) declared a sulfur ceiling content for all marine fuels from the current 3.5% to 0.5% as of 2020. The most common marine fuel used today has 2.7% sulfur.

Earlier in 2018, an IMO subcommittee announced a proposal to ban the carriage of non-compliant “bunker fuel” aboard ships that have not installed on-board equipment to remove air-born contaminants. IMO approved this proposal in April. This is another strong indicator that the IMO new environmental regulations will stick: leaving shippers, fuel producers and island countries in a conundrum.

DEFINITION: Bunker fuel or bunker crude is technically any type of fuel oil used aboard vessels. It gets its name from the tanks on ships and in ports that it is stored in; in the early days of steam they were coal bunkers but now they are bunker fuel tanks. The Australian Customs and the Australian Tax Office define a bunker fuel as the fuel that powers the engine of a ship or aircraft. Bunker A is No. 2 fuel oil, bunker B is No. 4 or No. 5 and bunker C is No. 6. Since No. 6 is the most common, "bunker fuel" is often used as a synonym for No. 6. No. 5 fuel oil is also called Navy Special Fuel Oil (NSFO) or just navy special; No. 5 or 6 are also commonly called heavy fuel oil (HFO) or furnace fuel oil (FFO); the high viscosity requires heating, usually by a recirculated low pressure steam system, before the oil can be pumped from a bunker tank. Bunkers are rarely labeled this way in modern maritime practice. Source: Wikipedia

Bunker fuel is the fastest growing fuel niche. In 2011, the sector increased consumption by 600,000 barrels per day. By 2018 it increased by 800,000 barrels per day. The total daily demand in 2016 was 3.3 million barrels per day. Sea-going vessels consume about 6% of all crude.

The USA, China, United Arab Emirates. Singapore and South Korea are the biggest producers of bunker fuel.

“Intermodal said that “according to Morgan Stanley’s latest report, besides key fundamentals and political externalities, oil prices will be severely impacted as new international shipping regulations takes effect, overhauling the types of fuels produced by refiners, and will push Brent crude reaching $90 a barrel by 2020. An increase in demand of low sulphur fuels will hike demand of middle distillate products (diesel and marine gasoil), that will result a significant need for more crude”