(Reuters) – Exxon Mobil Corp expects high-sulfur fuel oil demand to fall 25 percent by 2025, as a new set of emission regulations kick in next year, a top-level official at the U.S. oil and gas company said on Monday.
A new 0.5 percent sulfur content cap in shipping fuel set by the International Maritime Organisation (IMO) will come into effect in 2020.
The International Energy Agency has forecast high-sulfur fuel oil demand to fall 60 percent next year, while marine gasoil demand to more than double.
Exxon’s forecast comes as its refining business is struggling to find enough heavy crude to make fuel oil and other distillates, in the face of U.S. sanctions on Venezuelan crude.
Heavy crude accounts for nearly two-thirds of U.S. oil imports. Of this, Venezuela’s oil accounted for 10 percent of heavy crude imports in 2018 and about 13 percent in 2017, according to U.S. Energy Department figures.
Exxon President Bryan Milton was speaking at the Scotia Howard Weil energy conference in New Orleans on Monday.
Reporting by Arundhati Sarkar in Bengaluru; Editing by James Emmanuel