The biggest shift in oil market's history is 6 months away from us




Tens of thousands of ships sailing the world's oceans burn more than 3 million barrels of sediment-like fuel with a high sulfur content every day. But from next year, the shipping industry will have to comply with rules that have to drastically reduce sulfur emissions.

"This is the biggest change in the history of the oil market," said Steve Sawyer, senior analyst at Facts Global Energy.

"This will affect crude oil producers, traders, shipowners, refiners, commodity market investors, insurance companies, logistics companies, banks ... Who is left? I'm trying to think of someone who may not be affected. That's why it's a huge transition, Sawyer said.

What is IMO 2020?

On January 1, 2020, the International Maritime Organization (IMO) will bring in new emission standards that will significantly reduce ship-source pollution.

Against the backdrop of widespread pressure on cleaner energy markets, the IMO will prohibit craft from using fuels with a sulfur content higher than 0.5% compared to levels above 3.5% at present.

"A brick wall is set at the end of December that is being built in the past two years, or you can rush it upside down and say" it hurts "or find a way around it.

The new regulations are a result of a UN Commission Subcommittee's recommendation of more than a decade ago and adopted in 2016 by the UN IMO, which sets out rules on safety, security and shipping pollution.

"If you consider shipping along with all countries that consume oil, it will be number four or five on the list - so that's a huge amount of consumption," said Anthony Gurnee, Chief Executive Officer of Ardmore Shipping.

Ardmore Shipping is a US registered company based in Ireland, which owns and manages a fleet of tankers carrying refined petroleum products.

"We are going to a fundamentally different kind of fuel. It has a greater impact on the refining industry than on shipping, "Gurnee said.

It is assumed that the forthcoming measures will create an oversupply of heavy fuel oil, while at the same time increasing the demand for IMO-compliant products - thus increasing the pressure on the refining industry to produce significantly more than the latter.

This is particularly important, energy analysts say, as oil producers in the Middle East - such as Saudi Arabia from OPEC - are likely to lose because they rely on crude oil with high sulfur content.

The shipping industry is under great pressure to reduce sulfur emissions, as the pollutant is a component of acid rain that damages vegetation and wildlife and contributes to the acidification of the oceans.

The proposed policy change comes at a time when bets are high for the world's ships. At the end of last year, UBS analysts estimated that the green cargo market could cost at least $ 250 billion over the next five years.

 Trader Aleksandar Kumanov

Read more:

If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance


25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256

Universal numbers

World Financial Markets - 0700 17 600    Varchev Exchange - 0700 115 44

Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.

Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006

The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

chat with dealer
chat with dealer
Cookies policy