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Mediterranean ECA may be proposed next year: IMO

  • Market: Oil products
  • 23/05/19

A proposal for an Emissions Control Area (ECA) across the Mediterranean could be submitted next year, the International Maritime Organisation (IMO) said.

The IMO's head of air pollution and energy efficiency, Edmund Hughes, told S&P Global Platts' Bunker Fuel Conference in Amsterdam that there were discussions over a possible ECA in the Mediterranean for nitrous oxide (NOx) and sulphur emissions.

ECAs aim to cut emissions from ships near land in the hope of improving human health and mitigating pollution of the seas caused by shipping.

The onus for creating a proposal for a Mediterranean ECA would be on the 22 member states of the Barcelona Convention, he said.

The Italian and French environment ministries recently issued a joint call for the introduction of an ECA in the Mediterranean, although Cyprus, Greece, and Malta have previously opposed the move. The Barcelona Convention holds its annual meeting in December.

US President Donald Trump's administration has expressed scepticism over a sulphur cap on emissions from ships to be imposed by the IMO next year. From 1 January, 2020, ship's bunker fuel will be allowed to contain no more than 0.5pc sulphur, down from 3.5pc now.

The White House has advocated a slower implementation, so that "IMO 2020 occurs in a manner that is not harmful to consumers and the global economy". But Hughes told the conference the IMO's sulphur cap regulation would go ahead as planned on 1 January 2020.

Hughes said it was up to member states to determine how the IMO's new rules were enforced.

"The level of penalties is very much the prerogative of the port state's government," he said, adding that governments were reviewing their penalties to ensure they were tough enough financially to offset any commercial advantage from using non-compliant fuel oil.

The IMO last week agreed a standard format for reporting the availability of compliant fuel oil.


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10/04/25

Tariff concerns drive US VLSFO to 4-year lows

Tariff concerns drive US VLSFO to 4-year lows

New York, 10 April (Argus) — Very low-sulphur fuel oil (VLSFO) monthly averages at four US ports have declined to their lowest levels since 2021, driven by uncertainty surrounding US tariffs. Houston and New Orleans VLSFO monthly averages dropped to $470/t and $491/t, respectively, so far in April. That is the lowest average for Houston since April 2021 and the lowest since February 2021 for New Orleans. New York and Philadelphia VLSFO averages are at $498/t and $510/t, respectively, the lowest since April 2021 for New York and May 2021 for Philadelphia. Bunker market participants have had mixed reactions to the price decline so far. According to one trader, some buyers have been trying to buy bunker fuel with delivery dates for one month from now, to lock in the lower prices, rather than one week out, which is typical when buying bunker fuel in the spot market. Another market contact said they have seen a mixture of elevated buying interest but also some buyers who will hold off waiting to see if prices continue to drop or if the volatility in prices ease as there have been large price swings within the same business day. "I have not seen anything this volatile since the start of the Russia vs Ukraine war," the trader said. Oil futures went up by almost 5pc on 9 April reversing losses from early that morning after US president Donald Trump paused higher punitive tariffs against key trading partners such as the EU and Japan and increased tariffs against China. The wild swing for intraday bunker prices on 9 April , which typically traces Brent crude, lowered market demand. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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New tariffs could upend US tallow imports: Correction


10/04/25
News
10/04/25

New tariffs could upend US tallow imports: Correction

Corrects description of options for avoiding feedstock tariffs in 12th paragraph. Story originally published 3 April. New York, 10 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a far-greater collection of charges on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Some tariffs are eligible for drawbacks, meaning that producers could potentially recover tariffs they paid on feedstocks for fuel that is ultimately exported. And multiple biofuel producers are located in foreign-trade zones, a US program that works similarly to the duty drawbacks, and have applied for permission to avoid some tariffs on imported feedstocks for fuel eventually shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil's diesel market eyes Trump and Petrobras


10/04/25
News
10/04/25

Brazil's diesel market eyes Trump and Petrobras

Sao Paulo, 10 April (Argus) — Tensions surrounding whiplash changes in trade policies favored by US president Donald Trump have created favorable conditions for foreign diesel imports into Brazil, just days after state-controlled Petrobras cut its refinery gate diesel prices. On 1 April, Petrobras cut wholesale diesel prices by 4.6pc, bringing the average price to R3,550/m³ (226.86¢/USG) from around R3.720/m³ (237.73¢/USG). Foreign diesel prices had been trending lower than Petrobras' prices for more than a month prior to the announcement. The competitiveness of imported diesel led some retailers to delay the withdrawal of fuel contracted with Petrobras, even at the cost of paying penalties. Petrobras' price reduction made the company's diesel more attractive on the domestic market, but the scenario was short-lived. Within about 24 hours, on 2 April, Trump unveiled so-called "reciprocal tariffs" on products imported from practically all US trading partners, triggering a strong global reaction, and setting the stage for a showdown with China. Investors' concern about recessionary risks clobbered prices for a wide range of commodities traded on the world's stock exchanges. Nymex ultra-low sulfur diesel (ULSD) futures fell more than 10pc between 2-8 April, to a near four-year low. The volatility of the international markets has caused a turnaround in diesel prices on the Brazilian market. The heightened uncertainty led some participants to adopt a more cautious stance, waiting for prices to settle before making firmer decisions. "We are planning imports where we need to cover supply needs, without lengthening our position," said one trader. Between 2-8 April, the price indicator for ex-port land terminal diesel traded on the spot market at Santos, Paranagua, Suape and Itaqui ports fell in relation to Petrobras' basis by R140/m³, R230/m³, R102.5/m³ and R160/m³, respectively. The move followed international volatility caused by trade conflicts, as imported diesel responds to nearly 20pc of all the Brazilian domestic supply. The escalation of trade conflicts led to an interruption in talks between importers and suppliers last week, when both sides took the opportunity to assess the impact of developments on the fuel sector. Around 1.6mn m³ of imported diesel is expected to land in Brazil in April, according to data from shipping agencies and energy analytics firm Vortexa. If realized, the volume would represent a 33pc increase over the same period of 2024. To traders, the surging volume of product available on the domestic market and the wide variation in daily prices between different locations could offer good trading opportunities for importers. The Petrobras factor Market participants are also monitoring Petrobras' behavior in this new context. The price cut at the company's refineries and the subsequent reopening of arbitrage for imports has reinforced the perception that further price cuts are on the company's radar. Deeper cuts would be welcomed by Brazil's federal government, which is locked in a fight against creeping inflation. Rising prices are being blamed for the slipping popularity of President Luiz Inacio Lula da Silva. Diesel has a small influence on the extended national consumer price index IPCA portfolio, at around 0.24pc, but the view is that the fossil fuel has a significant indirect impact on the formation of food prices, which account for 21.87pc of the index. Despite favorable arbitrage for imported product in March, part of the market was surprised by Petrobras' latest price cut. There is a perception among traders that the predictability of the company's decisions has diminished. The company's management has indicated that it will not act while uncertainty in global markets persists. By Marcos Mortari Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EIA lowers summer gasoline price forecast


10/04/25
News
10/04/25

EIA lowers summer gasoline price forecast

Houston, 10 April (Argus) — The US Energy Information Administration (EIA) lowered its gasoline price forecast for the summer driving season because of low crude prices. US retail gasoline prices will average about $3.10/USG from April to September, the lowest inflation-adjusted summer average price since 2020, the agency said in its in its monthly Short-Term Energy Outlook (STEO). The forecast is about 20¢/USG lower than EIA's previous forecast. The agency expects gasoline prices to average near $3.20/USG in the summer of 2026 as a continuing decline in crude prices is offset by refinery closures and lower gasoline inventories. LyondellBasell recently shut all units at its 264,000 b/d Houston, Texas, refinery and Phillips 66 is planning to shut its 139,000 b/d Los Angeles refinery by October. US summer gasoline prices reached a decade high of $4.67/USG in 2022, decreasing in subsequent years, the EIA said. The agency delayed the release of the STEO by two days to consider significant changes in markets after the US announced sweeping import tariffs against major trading partners. Crude prices have dropped sharply since the 2 April tariff announcement, even as US president Donald Trump paused the more punitive tariffs for 90 days on Wednesday. Amid the tariffs, a core group of eight Opec+ crude producers in a surprise move last week sped up plans to gradually unwind some 2.2mn b/d of production cuts, adding downward pressure to crude prices. The NYMEX front-month WTI crude contract was trading near $59/bl at 12:30pm ET on Thursday, down by more than $12/bl since the 2 April tariff announcement. The modeling and analysis for the STEO was completed on 7 April. More recent policy changes are not incorporated, the EIA said. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US absence unlikely to derail IMO talks


10/04/25
News
10/04/25

US absence unlikely to derail IMO talks

London, 10 April (Argus) — The US delegation's absence from the 83rd International Maritime Organisation's (IMO) Marine Environment Protection Committee (MEPC) meeting is unlikely to derail the outcome of discussions on a greenhouse gas (GHG) economic pricing mechanism, market participants told Argus . This comes after the US sent a statement to foreign embassies of countries partaking in the IMO GHG economic pricing mechanism talks, confirming the US' absence from the negotiations. The statement says: "President Trump has made it clear that the US will not accept any international environmental agreement that unduly or unfairly burdens the US or the interests of the American people," according to a document seen by Argus . It adds: "Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to US ships and compensate the American people for any other economic harm from any adopted GHG emissions measures". The statement ends: "The US will engage with partners on energy and investment issues of common interest. We stand ready to work with you to advance our shared commitment to energy security and economic growth". "The US will not be engaging in negotiations at the IMO's 83rd Marine Environment Protection Committee. Consistent with President Trump's executive orders on international environmental agreements and on energy dominance, it is the administration's policy to put the interests of the US and the American people first in the development and negotiation of any international agreements", the US State Department told Argus . IMO member countries are voting this week on the economic pricing mechanism for marine GHG emissions, for which the structure is expected to be agreed by 11 April, according to IMO secretary-general Arsenio Dominguez. Even if the US does not engage in the GHG talks, it cannot unilaterally block decisions at the IMO, a spokesperson told Argus . Many of the GHG measures remain under discussion, with final approvals from the working group expected by 11 April. "The US doesn't have a huge share of the global ocean-going fleet, so their absence or opposition probably won't change the broader [IMO members] consensus", a Chile-based ship owner told Argus . US imposing "reciprocal" costs on foreign ships calling at US ports will almost certainly get passed on to [US] consumers, which could lead to higher prices for goods in the US, the owner said. If the measures are ratified by IMO member nations, US-flagged ships will probably not adhere to IMO's regulations when they call into ports of member countries, a Singapore-based shipbroker said. "We are not expecting any impacting on Asia-Pacific region yet, and it's subject to what is agreed at the MEPC and how levies are calculated," the shipbroker added. Despite not having veto power, the US remains the largest financial contributor to the UN, a Greece-based shipowner told Argus . If international shipbuilding credit lines begin to tighten under US influence, other countries may align with Washington's stance, it added. The IMO has 176 member countries. Greece, China and Japan account for the largest shares of the global ocean-going fleet. During the ongoing session, member states have approved interim guidance on the carriage of biofuel blends. The guidance allows conventional bunker ships certified for carriage of oil fuels under Marpol Annex I to transport blends of not more than 30pc by volume of biofuel , as long as all residues or tank washings are discharged ashore, unless the oil discharge monitoring equipment is approved for the biofuel blends being shipped. By Hussein Al-Khalisy, Madeleine Jenkins, Stefka Wechsler, Mahua Mitra, Natália Coelho, and Gabriel Tassi Lara Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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