Arcane Pollution Rule May Cost Saudis and Neighbors Billions - Bloomberg:
The world’s biggest oil-exporting region may lose billions of dollars in annual revenue when an obscure United Nations requirement for ships to burn cleaner fuel takes effect next year.
Saudi Arabia, Iraq and other Middle Eastern suppliers of heavy, high-sulfur crude could take a hit as refiners favor lighter, low-sulfur grades that they can process more easily into less-polluting fuels. The UN maritime agency’s new rule kicks in on Jan. 1, and estimates of the possible price impact vary widely.
Revenues could drop by $5 a barrel starting in the second half as refiners and shippers prepare for the change, Citigroup Inc. says. Some traders expect a less dramatic slide, but even Saudi Energy Minister Khalid Al-Falih, whose country ships more oil than any other, sees a $1 reduction for some grades.
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