Triggered by this amendment, the price was started to drop, and irrespective of several subsequent agreements on the reduction in production, the Dubai spot price was dropped down to 9.53 dollars/barrel in December, 1998 through the adverse effect of the currency crisis and warm winter.
Table 9.2 Transition of World's Crude Oil Production
Unit: 1 million barrel/day
Source: Prepared from Oil & Gas Journal Magazine
The stagnation price of crude oil brought the reduction of the profit in the world oil industry, and as one of the countermeasures, large mergers between Majors, i.e., BP and AMOCO in August and between Exxon and Mobil at the end of November were announced. Also in Japan, the merging agreement between Nippon Oil Co., Ltd. and Mitsubishi Oil Co., Ltd. was announced.
It is considered also in future that the oil market is greatly affected by 1] the possibility of the cooperated reduction in oil production by OPEC and non-OPEC oil producing nations, 2] the trend of the economical recovery in Asian areas, 3] the trend of the world economy focusing on Russia and Central/South America, 4] the increase/decrease of the limited export of oil from Iraq now under the sanctions of UN, and 5] the factors such as the climate in the winter time which is the demand season.
The domestic situation in 1998 was also affected by the business recession, and both the crude oil processing and the fuel oil sales were reduced. The processed quantity of the crude oil was reduced by 6.19 million KL (2.5%) compared with that in the previous year. The system operation ratio in 1998 was 78.6% that of the previous year and dropped by 3.0% compared with 81.6% in the previous year. The fuel oil sales was also reduced by 2.5% on the whole compared with that in the previous year. In particular, due to the reduction in C fuel oil for cargo transport and power generation accompanied by the business recession, the diesel fuel sales and the fuel oil sales was reduced by 3.6% and 3.1%, respectively, showing the successive reduction to the previous year.
The import and the export of fuel oil were reduced by 980,000 KL and 54,000 KL, respectively. The domestic sales of bond fuel oil (A, C) in 1998 was 6.14 million KL, and was increased by 6% compared with that of the previous year. The import was 160,000 KL (reduction by 65%), and the domestic production was 5.69 million KL (increased by 17%), and the ratio of import/production was greatly reduced compared with the previous year. (Table 9.3)
Table 9.3 Demand Results of Domestic Bond Heavy Oil (1998)
Unit: 1000 KL
9.1.2 Marine Fuel Oils
The regulation of the exhaust gas from ships was adopted as Annex VI of MARPOL in September, 1997 at IMO (International Maritime Organization), and the ratification work has been promoted now3). The regulation on NOx is applied to the diesel engine to be mounted on the ships to be constructed on and after January, 2000, and the provisional application until the Annex comes into effect has been discussed at the committees after MEPC 41 (Marine Environment Protection Committee, held in March, 1998). The global warming effect was also discussed, and it was recognized that emission of the exhaust gas from oceangoing ships is important, but no summarizing directionality has been obtained.
As for the exhaust gas from ships, in Japan, the “Survey on Examination of the Method for reducing the Air Pollution Substance emitted from Ships” under the commission of the Environment Agency has been achieved successive to the previous year.
As for the ISO Standard for marine fuel oil, the amendment work for the second edition issued in 1996 has been promoted4). The items clearly expected to be amended now, include 1] Unification of the fuel grade RM45 with RM55, 2] Change of the viscosity value described at the end of the nominal fuel grade from 100℃ to 50℃ 3] Amendment of the allowable water content from 1% to 0.5%, 4] Amendment of the standard ash value from 0.2% to 0.15% 5] Amendment of the sulfur content from 5.0% to 4.5% in accordance with the IMO regulation. In addition, prohibition of mixing waste oil in fuel oil, and the increase/decrease of the fuel oil grade number are successively examined. The third edition will be published in 2001.
