Bloomberg: Gulf states risk losing billions with adoption of cleaner fuels

Bloomberg expects the Gulf oil states to lose billions of dollars in oil revenues. A "vague demand" for the United Nations will come into force next year, with ships calling for cleaner fuels.

Bloomberg said in its report that Saudi Arabia, Iraq and the rest of the Middle East could be affected by high sulfur heavy oil suppliers as refiners prefer light crude for refining easy.

The US banking group Citigroup estimates that oil revenues could fall by $ 5 per barrel in the second half of 2019 as refiners and shipments are ready for the expected change.

But traders expect a less dramatic decline. Even Saudi Energy Minister Khalid Al-Falih said that "the decline will be a dollar and will last a limited period, as the refining sector will be adjusted."

Bloomberg notes that the decline in heavy oil demand will increase financial pressure on Gulf producers, whose revenues have fallen after the collapse of oil prices in mid-2014.

"Not only will heavy oil producers lose market share, but they will also be affected by prices," said Eric Lee, an analyst at Citigroup.

Middle East producers, who sell about 20 million barrels a day, could lose annual revenue of $ 7 to 37 billion, but the impact on Saudi Arabia, Iraq, Iran, Kuwait, the United Arab Emirates, Qatar and Oman are expected to decline in recent years, the agency said. With refineries upgrading their facilities to produce more light fuels.

The International Maritime Organization (IMO) will reduce the current world fuel rate of 3.5% to fuel sulfur, which will require ships to purchase low-sulfur fuel from their emissions. .

Source: Bloomberg