FUEL OIL
Global refineries produce around 8 million barrels of residual fuel oil every day as a by-product of their refining process.
Around 4 million barrels of this oil is traded freely on the open market. Both affordable and abundant in resource, this workhorse fuel is the gasoline of the global economy. With two major uses being power generation and ship bunker fuel, VONOIL is able to supply both sectors.
Over the last decade, this demand has declined overall, but regions remain where demand is resilient. Pakistan is one of the world’s largest consumers for energy-generating purposes, and Japan and China both use significant quantities of imported fuel oil to generate their power. Because fuel oil generally trades at a discount to crude, refiners seek to reduce their production amount in favor of refined products. As new and upgraded refineries produce less fuel oil these trends will constrain supply.