MAKE A DONATION

AN ECONOMIC ASSESSMENT OF THE INTERNATIONAL MARITIME ORGANIZATION SULPHUR REGULATIONS ON MARKETS FOR CANADIAN CRUDE OIL

An Economic Assessment of the International Maritime Organization Sulphur Regulations on Markets for Canadian Crude Oil

Study Released July 31, 2018

CERI Study No. 175

The International Maritime Organization is enacting regulations to limit sulphur in bunker fuel to 0.5% by 2020. This will impact the demand for and price of heavy crude oil produced in Canada. The
majority of this crude type is produced in Alberta. CERI will consider the following questions in assessing the impact of the IMO standard:

- How do the changes in the bunker fuel oil market affect crude oil differentials and valuations? (particularly LLS-Maya & WTI-WCS)

- What volumes of Canadian heavy production will be effected by the IMO spec change in 2020?

- Can enough low sulphur bunker fuel oil be produced in 2020? How will refineries meet the demand?

- Will there be excess high sulphur bunker fuel oil in 2020?

- How will the excess bunker fuel oil price into the market?

- Is the marine shipping industry investing in scrubber technology to allow continued use of high sulphur fuel oil?

- How aggressively is the marine industry pursuing scrubber technology?

- Are refiners investing in technology to manage the changes related to IMO spec change in 2020?

- How will the profitability of refineries be impacted by the regulation?

Study_175_Executive_Summary Study_175_Full_Report Study_175_ Executive Summary_French Study Overview