As the IMO is urging the shipping industry to reduce its emissions, limiting the sulphur content in fuels to 0.5%, this will create an oversupply of high-sulphur fuel oil, and increase demand for IMO-compliant products as well. As a result, the refining industry will have more pressure to produce more "green" fuels.

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Morgan Stanley said however, that some companies will benefit from this development. Namely, Repsol, Reliance Industrie, Valero Energy and Tupras Turkiye Petrol Rafinerileri AS are among those who will benefit the most, as they are prepared to produce distillates.

Meawhile, middle distillate markets are already starting to tighten up. Diesel and gasoil stockpiles in Europe, the US and Asia are below their five-year seasonal averages, while, distillate demand has grown at an annual rate of about 600,000 barrels a day since 2011. This accounts for an acceleration of 800,000 barrels a day.

Moreover, the new regulation will grow demand by an additional 1.5 million barrels a day by 2020, making traders to find the right product supplies, to boost boost crude prices.

At the same time, global crude production will increase, however it will not surpass the 5.7 million barrels a day needed by 2020 to meet the additional demand for fuels, Morgan Stanley mentioned.