From January 1, 2020, ships will need to reduce their fuel's sulphur content to 0.5%, according to IMO. This could reduce the demand for high sulphur fuel that PDVSA produces. In turn, this can reduce prices, while clean fuels' prices will increase.

In fact, sour crude produced by Venezuela and Mexico could be sold at deeper discounts, while demand for lighter distillates is likely to grow. This development could negatively impact the economies of Venezuela, Mexico and Ecuador that rely on imported diesel and gasoline.

As of today, the majority of refiners in Latin America have not invested in low sulphur technologies or fuels, thus having a disadvantage, especially considering the fact the 2020 regulation could reduce global demand for high sulphur bunker fuel to as low as 1 million barrels daily from 4 million barrels.

Nevertheless, Petroleo Brasileiro is trying to leverage the fuel shift, Guilherme Franca, executive manager of commercialization noted. The company is already exporting IMO-compliant fuels and is also exploring the possibility of opening a fuel oil storage in Singapore.