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Middle East: IMO2020 paints ‘gloomy’ picture for Iraq and Iran

Arab Petroleum Investments Corporation weigh effect of regulation on Gulf Cooperation Council countries.

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The Arab Petroleum Investments Corporation (APICORP), a multilateral development bank focused on the energy sector, recently published a report analysing the impact of IMO 2020, which introduces a global 0.5% sulphur cap for marine fuel, on the Gulf’s oil dynamics.

In short, it believes the shipping industry’s choice of option to meet IMO 2020 compliance will directly impact the supply/demand dynamics of the Gulf’s oil industry, and the results will be varied.

“The IMO regulations will create winners and losers across the industry,” says Mustafa Ansari, Senior Economist at APICORP.

“Uncertainty around the availability of LSFO, HSFO prices and scrubbing technology makes it difficult for ship-owners to take a decision on what outlet to adopt for IMO compliance.

“What is more clear is that demand for HSFO is likely to decline, whilst demand for compliant fuels such as marine diesel and LSFO will increase. This means that refineries that have the means to reduce fuel oil production, or that are geared to producing middle-distillates such as those across the GCC will benefit from the additional demand.

“By contrast, countries without this capability, and with fewer alternative sources of demand, such as Iran and Iraq, will not be able to absorb excess supplies of fuel oil.”

A summary of the APICORP report is below:
In 2017, demand for fuel oil averaged 7.5 million barrels per day (mb/d) of which 3.5mb/d was HSFO, used mainly in bunkering. Going forward, the IMO regulations will reduce demand for HSFO whilst demand for both LSFO and marine diesel will increase. Other things being equal, the differential between sour-sweet crudes, HSFO-LSFO and distillate-HSFO could widen. In the short term, the ability of the global refining industry to produce an estimated 8mb/d of compliant bunker fuel for the world’s ships by the IMO target of 2020 will be tested. Depending on assumptions about scrubber uptake, the resulting boost to demand for marine diesel alone is expected to be around 2.1-2.5mb/d.

In the likely scenario that there will be more reliance on LSFO and marine diesel, the downstream sector will create winners and losers, with simple refineries at most risk. Refineries that failed to invest in cokers and other residue destroying equipment needed to contain HSFO production will find it difficult to market the fuel. On the other hand, more complex refineries will benefit from higher margins. In the highly competitive refining market, this could pave the way for further closures. In particular, Saudi Arabia could benefit significantly if shippers choose to switch to LSFO or marine diesel, as it will be able to meet this demand and increase exports. On the other hand, if scrubbing is the preferred route, there is enough demand from the country’s power sector to absorb its existing HSFO production, and at a reduced cost.

Geared to producing more diesel, the GCC will be in a good position to adjust to the IMO rules, with ample opportunities for the likes of Saudi Arabia and Kuwait to utilise excess HSFO in their respective power sectors. The GCC as a whole has embarked on many initiatives across the oil value chain that has helped them adapt to global developments. Some of these investments, such as additional refining capacity were built with an eye to supplying a growth in Asian demand for diesel driven by China. But the decision taken by the Chinese government to rebalance the economy and shift away from manufacturing and more towards consumer goods and services dampened the prospects for diesel exports. Luckily, the timely changes in IMO regulations have provided the GCC with an alternative market for diesel exports.

For Iraq and Iran, on the other hand, the picture is gloomy. Already struggling to meet domestic demand, the damage to Iraq’s Beiji refinery drastically reduced the country’s capacity. In addition, the refining sector as a whole is not as sophisticated as those in the GCC, and their ability to produce low sulphur fuel is questionable. Worse, with lower demand for HSFO, Iraq will struggle to get rid of the fuel, whilst the domestic power sector is not large enough to absorb higher quantities of HSFO, especially given that the majority of new power generation will be gas-fired plants.

As for Iran, whilst fuel oil consumption has been increasing in the region driven predominantly by Saudi Arabia, and demand in the region more generally has been relatively stable, only Iran is exhibiting a fall in fuel oil consumption, declining from 382kb/d in 2014 to 214kb/d in 2017. This means that it will struggle to find a market for its excess HFSO, a situation made worse by the re-imposition of US sanctions; whilst its refining sector is not sufficiently sophisticated to produce LFSO, nor is there sufficient demand from the power sector.

The full version of the report IMO 2020 on MENA: Impacts Varied is available here.

Dr. Abdulwahab Al Sadoun, Secretary General, Gulf Petrochemicals & Chemicals Association earlier shared an article (below) with Singapore-based independent bunker publication Manifold Times on how IMO 2020 will impact the Middle East chemical industry.

Related: GPCA: IMO2020 to affect Gulf Cooperation Council chemical industry

Published: 24 September, 2018
 

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Ammonia

AM Green plans to build green ammonia plant at Indian port

Initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes, says VOC Port Authority.

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VO Chidambaranar (VOC) Port Authority on Friday (29 May) said it has signed a Memorandum of Understanding (MoU) with India’s ammonia producer AM Green Ammonia to collaborate in the development of a green ammonia production plant.

The plant will have a capacity of one million tonnes per annum (MTPA) at Tuticorin.

The initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes. 

The project is expected to support the development of green fuel corridors connecting VOC Port with major ports in Europe and Asia, thereby strengthening India’s position in the global green fuels value chain.

VOC Port also signed a Memorandum of Understanding (MoU) with Bureau Veritas (India) Pvt. Ltd., to collaborate on Green Port certification, emissions accounting, ESG reporting, safety validation, development of green bunkering practices, and establishment of a Centre of Excellence for green fuels and sustainability.

The port also plans for an upcoming 750 m³ green methanol bunkering facility.

 

Photo credit: Naveed Ahmed on Unsplash
Published: 3 June, 2026

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Port & Regulatory

Study: Major drop in ship sulphur emissions confirmed following IMO regulations

National Centre for Atmospheric Science study found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following IMO’s 2020 regulation.

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Recent global regulations have significantly reduced sulphur emissions from ships, helping to improve air quality in coastal regions – confirmed by a recent international study led by researchers at the National Centre for Atmospheric Science. 

The research, published in Environmental Science: Atmospheres, used aircraft and ground-based instruments to measure sulphur dioxide and nitrogen oxides emitted by ships in the North-East Atlantic and European coastal waters between 2019 and 2023.

The team found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following the International Maritime Organization’s 2020 regulation, which capped sulphur content in marine fuel at 0.5%. 

Before the change, many ships exceeded the previous 3.5% limit. After 2020, only a small number of ships were found to breach the new standard.

In European sulphur Emission Control Areas (SECAs), such as the English Channel and the Port of Tyne, sulphur levels were even lower – well below the stricter 0.1% limit. Interestingly, ports outside these zones, like Valencia in Spain, also showed low sulphur levels, likely due to EU rules requiring cleaner fuel when ships are docked for extended periods.

This is the first study to use aircraft-based measurements and predictions from the Ship Traffic Emission Assessment Model (STEAM3) to assess ship emissions outside of sulphur control zones since the 2020 regulation came into effect. The findings support the widely held view that ships now emit around seven times less sulphur than before the rule change – an important step toward cleaner air and healthier coastal environments.

Note: The research, titled ‘SO2 and NOx emissions from ships in North-East Atlantic waters: in situ measurements and comparison with an emission model’ can be found here. 

 

Photo credit: shraga kopstein on Unsplash
Published: 8 December, 2025

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Interview

IBIA Annual Convention 2025: ‘Exciting times’ for post IMO 2020 bunker suppliers, states Equatorial

Choong Sheen Mao, Chief Operating Officer, Equatorial, describes to Manifold Times the pre/post IMO 2020 challenges and evolution of bunker suppliers.

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The International Bunkering Industry Association (IBIA) will be hosting its flagship Annual Convention in Hong Kong at the Hong Kong Convention Exhibition & Convention Centre between 18 to 20 November 2025, as part of Hong Kong Maritime Week.

Choong Sheen Mao, Chief Operating Officer, Equatorial Marine Fuel Management Services (Equatorial), speaks to bunkering publication Manifold Times about the challenges of a post IMO 2020 bunker supplier.

MT: How does Equatorial continue to offer customer assurance and maintenance of marine fuel quality to ISO8217 standards despite increasing complexity of bunker fuel blends?

We maintain our focus to provide compliant, quality and competitively priced products to our customers. There is no shortcut. We source our products from a wide range of cargo producers and suppliers. We continue to be strict and vigilant with our testing programme for our products before delivering them to our customers. Equatorial has deepened our engagement with the wider industry to have a better and up-to-date understanding of the existing and new marine fuels.

MT: Can you share the evolution of commercial marine fuel procurement, blending and trading strategies on the back of increasing fuel types (pre/post IMO 2020)?

Pre IMO 2020, the main types of marine fuel procured and consumed by vessels were high-sulphur fuel oil, marine diesel oil and marine gas oil. Trading strategies were therefore closely linked to that within the oil industry.

However, many of the new fuel types are from other industries. For example, biofuels, methanol and ammonia are mainly products from the chemical and agriculture industries. There are marked differences between these industries and the energy industry (in particular, the marine fuels industry). LNG is from the gas industry which is distinct from the oil industry.

Without an existing liquid paper market for many of these commodities (especially as a marine fuel), the price risk management is less straightforward. Furthermore, commodity prices are no longer the sole consideration for price itself. The price of compliance must be considered. This could range from guaranteeing the origin of the marine fuel, its sulphur properties as well as its carbon intensity. The list goes on.

MT: Operational wise, what are the changing role and responsibilities of a bunker supplier to date, compared to before IMO 2020?

The role and responsibility of a bunker supplier have evolved. Fundamentally, it has been about providing quality marine fuels at competitive prices. Quantity assurance has been a critical concern which led to the mandatory implementation of the mass flow meter system for bunkering in the Port of Singapore. Interestingly, due to the nature of credit terms in the bunker industry, bunker suppliers also performed the role of “bankers” by extending favourable credit terms to shipowners and charterers.

These days, post IMO 2020, things have become even more complicated. Today, a bunker supplier retains the abovementioned roles and responsibilities, and much more – it has to ensure compliance with a plethora of rules and regulations. Compliance not only with sulphur cap requirements, but with international and regional sanctions and restrictions unrelated to the quality of the marine fuel itself. In fact, especially with alternative low- and zero-carbon marine fuels, this means compliance with standards, rules and regulations on sustainability such as the European Renewable Energy Directive and/or International Sustainability and Carbon Certification. There is also the need to comply with increasingly stringent safety regulations on both conventional and alternative marine fuels.

In addition to the above, a post IMO 2020 bunker supplier is still expected to supply compliant and quality fuel at competitive prices.

MT: Equatorial is Singapore’s largest local-born supplier; what is the next big thing for the company?

Equatorial continues to adapt and improve with the times, while maintaining its core values – Integrity, Teamwork, Commitment, Proficiency and Quality, and Safety and Environment. The bunker industry is a highly competitive one, and it is our intention to keep our competitive edge and remain relevant. This means that we have had to step out of our comfort zone and embrace the two mega trends of our time – digitalisation and decarbonisation.

We have been early adopters and developers of the electronic bunkering note as part of our own digital bunkering efforts. We have diversified our product offering to include low carbon marine fuels and are proud to be one of the pioneers for bunkering B100 biofuels earlier this year. This was made possible by the arrival of our IMO Type II chemical and oil bunker tankers. These same bunker tankers are also capable for carrying and delivering methanol. Equatorial has invested in an LNG bunkering vessel (LBV) newbuilding that is set to be delivered in Q3 2027. We are also involved in a study to develop low- or zero-carbon ammonia bunkering in Singapore.

These are exciting times.

Note: Choong Sheen Mao is amongst panellists featured in ‘Session Three: Bunker Sellers Panel’ at the IBIA Annual Convention 2025.

Join the Conversation

With over 300 delegates expected, the IBIA Annual Convention 2025 is set to be a defining moment for the marine fuels industry. Registration is now open via the IBIA Annual Convention website.

 

Photo credit: Manifold Times
Published: 31 October 2025

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