With sulphur standards becoming stricter, in the US and Europe in particular, the Middle East has finally accepted that it needs to go down the same route.
In Europe, sulphur limits for gasoline and diesel were set at 50 parts per million (ppm) at the start of 2005. The US has gone even further, setting sulphur content for gasoline and diesel at a maximum of 30 and 15 ppm respectively in 2006.
Oil giants such as Saudi Arabia, Kuwait and the UAE, with their lighter, low-sulphur crude, have not had to worry too much about new legislation until now.
But as the Middle East’s reserves of light crude dwindle in the coming years, the crude they will be refining in the next decade and beyond is overwhelmingly of the heavy, high-sulphur variety.
It is this, rather than a sudden commitment to green issues, that is behind Saudi Arabia’s plans to spend heavily on refinery modifications over the next five years.
With so much of the world’s refinery capacity on their doorsteps, the region’s national oil companies are installing more desulphurisation facilities and building up their capacity to treat heavier crude.
In turn, every new refinery being built in the Gulf states will, as a matter of course, have facilities in place to ensure sulphur levels meet the new international requirements. This is likely to cost tens of billions of dollars.
But for Middle East refiners, making a move now to widen their product range and improve their fuel quality is essential if they are to continue competing globally.