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
14 April 2026
The GECF has warned it may revise its projections for demand this year downwards in light of conflict in the Middle East, although it maintains its forecasts for 2027 and onwards
13 April 2026
Petroleum Economist analysis highlights sharp shift from crude oversupply to market deficit, with Iraq and Kuwait badly affected and key producers Saudi Arabia and the UAE also seeing output sharply lower
13 April 2026
Turkmenistan is moving ahead with a modest expansion of the giant Galkynysh field to sustain gas deliveries abroad, but persistent delays to other key pipeline projects and geopolitical risks continue to constrain its export ambitions
13 April 2026
Expensive electricity has forced out swathes of energy-intensive industry and now threatens the country’s ability to attract future investment in datacentres and the digital economy
