The glut in low sulfur fuels has been a double-edged sword for the shipping industry. It muted the impact of availability and compatibility concerns at the cost of lower prices, which have mirrored the wider crude market since May.

The spread between physical prices for 3.5%S FOB Rotterdam barges in 2019 and 2020 reached as close as $4/mt year on year on Sept. 1, assessed at $257/mt, before the spread widened again.

US crude oil inventories likely edged lower in the week ended Sept. 4 as refinery demand picked up following Hurricane Laura, an S&P Global Platts analysis showed Sept. 8.

The discussion has now pivoted to decarbonization, with methanol potentially set to play a bigger role, Raitt said.

South Korea, which relies on imports to meet all of its oil and gas needs, is making a push towards renewable and clean energy sources including hydrogen, but hurdles such as high costs and political uncertainty could slow progress.

Spot market volatility props up HSFO demand.

European high sulfur fuel oil has recovered more rapidly than its sweeter cousin, 0.5%S marine fuel, from the global crude oil price crash earlier this year.

Refinery and port closures, along with production shut-ins ahead of two storms threatening the US Gulf Coast are poised to impact crude oil prices this week.