IMO 2020 effect disrupts fuel oil contract renewals
A traded market trying to price in uncertain IMO 2020 implications is wreaking havoc with term contract negotiations
Fuel oil is nine months away from a drastic fall in global demand due to tighter emissions standards in the shipping sector. As a result, annual fuel oil contracts worth billions of dollars that have largely peacefully rolled over for years are this year becoming the subject of frantic renegotiations, forcing even the most risk-averse companies to, in effect, take large bets on the future. The UN's International Maritime Organisation (IMO) is cracking down on the sulphur content of marine fuels. From 1 January 2020, the new ceiling is 0.5pc sulphur content, down from 3.5pc currently. This prevents much high sulphur fuel oil (HSFO), which averages over 2pc sulphur globally, from being used in
Also in this section
8 December 2025
The Caribbean country’s role in the global oil market is significantly diminished, but disruptions caused by outright conflict would still have implications for US Gulf Coast refineries
5 December 2025
Mistaken assumptions around an oil bull run that never happened are a warning over the talk of a supply glut
4 December 2025
Time is running out for Lukoil and Rosneft to divest international assets that will be mostly rendered useless to them when the US sanctions deadline arrives in mid-December
3 December 2025
Aramco’s pursuit of $30b in US gas partnerships marks a strategic pivot. The US gains capital and certainty; Saudi Arabia gains access, flexibility and a new export future
