New 0.5 max sulfur content in diesel for worldwide ocean liners goes into effect 1/1/2020. WTI sulfur content is 0.24. Question—Is that causing any dramatic demand for our WTI in Reeves County, Texas? My understanding is that they can mix their high sulfur content oil with WTI oil and be in compliance with the new Maritime Laws.
Yes, a Barron’s article a few weeks ago suggested the 2020 rules for shipping fuel, affecting all ships and requiring retooling ship engines, will indeed benefit Permian Basin oil prices because Permian oil is low sulfur, much lower than Canadian and Venezuelan crude. Barrons did not quantify their prediction of Permian price improvement. Article said sulfur emissions into the atmosphere contribute to acid rain, and I know acid rain is really bad in Europe where shipping lanes are concentrated.