Energy & Science
Dirty Oil’s Unusual Demand Boost Set to Wane on OPEC+ Easing
- Refiners used fuel oil as alternative feedstock to heavy crude
- Surge in buying created market tightness; upends trade flows
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An unexpected demand boost for dirty fuel oil is poised to ease with the return of some OPEC+ crude supply from this month.
Cuts by the producer alliance combined with sanctions on Venezuela and Iran, hitting supplies of heavier crude and forcing processors from the U.S. to India to boost buying of high-sulfur fuel oil to use as an alternative feedstock in their refineries. Typically a by-product of crude refining, increased demand upended trade flows and drove the market into a deep deficit, but supply is expected to become more abundant as refiners switch back to crude with OPEC+ opening the taps.