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Ive heard its is strained filtered and sold to ocean going vessels to blend with fuel.
Not exactly. Heavy fuel oil might need "cutter stock" blended into it to get to the specified specific gravity, usually not more than 0.98 @ 60°F. This is done by the oil supplier, not on board. Cutter stock can be anything that is light and thin and flammable (but not too), usually the cheapest thing around. The flash point of the final blend must be over 150°F and there are other requirements to be met. Nobody knows what cutter stock is used--one way to dispose of flammable toxic waste, but keep quiet about it. Used motor oil wouldn't need to be strained or filtered.
Years ago "re-refined" oil was just deeply filtered and re-additized. Poor product. Modern re-refined oil has been through the hydrotreatment process to de-oxidize and can be OK. Used oil can be added to the crude oil stream at the refinery in small proportions. Or it can be mixed with other oils and used to make road paving asphalt, industrial heavy heating oil, etc. As I understand it, the only ecological benefit of re-refining oil is that less energy is consumed to re-refine than to refine lube from crude. If not re-refined, used oil will be burned rather than burning virgin fuel oil.