As the shipping industry prepares to comply with the IMO 2020 sulfur cap, middle distillate exports from the United Arab Emirates are running at a record high so far in October. The rise is particularly evident in gasoil exports, which are seen close to 400,000 bpd – the highest we have since March.
While jet fuel exports are robust, the biggest rise is seen in gasoil bound for Southeast Asia, to support bunkering in Singapore, the world’s largest bunkering port. Gasoil exports bound for the region jumped from 10,000 bpd in September to around 70,000 bpd this month. Exports heading to the region in October 2018 were negligible.
This sharp increase signals the impact of the IMO spec change, as vessels pivot to using marine gasoil (MGO) or low sulfur fuel oil (LSFO) rather than high sulfur fuel oil.
UAE’s jet fuel exports are also boosting total middle distillate exports, with strength in flows bound for Southern Europe. Exports to the region this month are the highest we have seen since July, which is among the busiest travel seasons in Europe. Exports of jet fuel bound for South Asia are also strong, running at the highest rate we have seen since 2017.