It’s not $US200 oil, and it’s not even $US200 benchmark oil — the price that starts to become relevant to average Josephines in the street — but it is expensive.

This week Santos (ASX:STO) was advertising a cargo of low-sulphur oil at about $US100 a barrel, according to Bloomberg.

Although the International Energy Agency (IEA) is forecasting a global oil glut in 2020 created by US drillers’ unceasing shale production, changes to maritime fuel rules in 2016 have started to bite in a small sub-sector of the market.

As Stockhead has reported, the International Maritime Organisation (IMO) required as of January 1 all ships to use marine fuels with a sulphur content no greater than 0.5 per cent.

The old content was 3.5 per cent. If they want to keep using high sulphur, fuel ships must have retrofitted on-board scrubbers or switch to LNG.

MIT economist Philip Verleger speculated in a paper in 2018 the shipping industry’s unpreparedness could lead to $US200 ($295) oil and “an economic crash of horrible proportions in 2020… [for] want of low-sulfur diesel fuel”. He called it the “Armageddon” scenario.

While the economic crash has not occurred, demand for low sulphur fuel has risen sharply in the last few months to the point where Santos can ask for a premium of $US32 a barrel over the benchmark Brent oil price, which today stood at about $US65, for oil from its offshore WA Pyrenees field.

That will be sweet news for the 19 ASX companies that produce the light crude now in demand by refineries looking to service global shippers.