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
30 December 2025
Heightened unpredictability in the global energy market underlines the vital nature of UGS, which provides reliability, affordability and resilience
29 December 2025
The surge in power demand created by the AI boom means energy policy and national security are now one and the same
24 December 2025
As activity in the US Gulf has stagnated at a lower level, the government is taking steps to encourage fresh exploration and bolster field development work
23 December 2025
The new government has brought stability and security to the country, with the door now open to international investment
