The Regulation That Could Push Oil To $200

[Turbineguy]

2. The strange thing about oil pricing

is that the proportions of various products from refineries don't change much. So a demand for gasoline that is met, creates a glut for jet fuel and diesel fuel. If ship's heavy fuel use was shifted to diesel it would be something like a 20% increase in demand for that product.

Pricing effects what people do. The market re-balances. Demand for gasoline drives the price up. People chose to fly or take the train (which in the US is diesel). Heavy fuel right now is about $435 per metric ton, Marine diesel is about $620 per metric ton (Rotterdam NL).

The thing about ship's propulsion is that the large slow speed two-stroke engines (as well as the smaller medium speed four stroke engines) can burn heavy fuel very efficiently, but there's a maintenance cost and on-board fuel processing is a major task. If this fuel was no longer used, ships would go to gas turbines, which with recuperators and exhaust economizers could be slightly more efficient , but have to burn more expensive fuel.

Then there the question of what would happen to this residual fuel? You can only pave so many roads or roof so many houses.