05NOV2019 - NEWS - 2020 sulphur rules driving tanker freight rate rise

Shipping analyst Poten & Partners see the impending 2020 sulphur cap driving tanker charter rates as owners are forced to use MGO.

In its weekly analysis, Poten says because only a small percentage of ships will have scrubbers by the start of the year, the freight rates will, at least initially, be driven by ships without scrubbers, burning more expensive low-sulphur fuel.

To examine the impact of the more expensive fuel, Poten compared the freight rates (in $/tonne) using the average HFO (Heavy Fuel Oil) and MGO (Marine Gas Oil) prices in 2019 with freight rates calculated using the average prices of MGO and Very Low Sulphur Fuel Oil (VLSFO) using the 2020 forward prices.