At the same time as crude supplies have shifted, rising uptake among shipowners of scrubbers -- fuel-cleaning equipment that allows vessels to continue burning high-sulfur fuel oil from 2020 without breaking the rules -- has rocketed since 2017.

That, in turn, has boosted expectations of future demand for the dirty product. Next year, more than 3,600 vessels will be fitted with the units, according to DNV GL, more than ten times the amount that was scheduled to be installed back in 2016. Remember, too, that these are often bigger ships with disproportionately large fuel consumption.

Demand is further being boosted by refiners spending on new equipment that cuts high-sulfur fuel oil output. An additional 400,000 barrels a day of so-called coking capacity is scheduled to be added this year, and a further 180,000 barrels a day in 2020, according to IEA data compiled by BloombergNEF.

Mispriced Curve

Even with the shifting global crude slate and extensive preparations from shippers and refiners, there’s still likely to be an oversupply of high-sulfur fuel oil when the new rules kick in. BloombergNEF forecasts a surplus of up to 1.52 million barrels a day next year.

In the forward market, prices of non-compliant material for delivery in 2020 have already slumped, recently falling to an $18 a barrel discount to Brent crude. Several analysts expect an even bigger drop.

"The high-sulfur fuel oil price will collapse," said Steve Sawyer, director of refining at Facts Global Energy.

He expects the discount to crude to average $30 per barrel in the first quarter of next year. Others are less bearish but agree with the trend: $23 per barrel is the figure given by Wood Mackenzie.

The market for gasoil is also being affected. While the 2020 crack -- or price relative to Brent crude -- is clearly reflecting a stronger market, the current $15.75 a barrel premium is weaker than expected: Wood Mackenzie sees the premium at an average $22 a barrel in the first quarter.

Nevertheless, recent warning signs over global oil demand aren’t helping gasoil’s cause. Bank of America Merrill Lynch has pointed to weaker diesel demand growth in OECD countries, dimming the bullishness emanating from IMO 2020.