IMO 2020: The calm before the storm

Prices of bunker fuels and the spreads between them are expected to change rapidly over the next 12 months

The shipping industry has known about the mandated shift to low sulphur fuel for approaching three years, but details remains elusive about the availability and pricing of compliant products. The International Maritime Organization (IMO) announced in October 2016 that only fuels with a sulphur content below 0.5pc, down from the standard 3.5pc, can be used from 1 January 2020. With global consumption of 3mn bl/d, it is a monumental change and its effects will be felt well beyond bunker fuel markets. While high sulphur fuel oil (HSFO) can be converted to low sulphur (LSFO), the capacity to meet global demand simply does not exist. The lead time⁠—especially as some were initially unconvinced it