28OCT2019 - NEWS - Bunker industry faces $2-4 billion IMO 2020 credit squeeze

The bunker fuel industry is increasingly seeing credit availability as one of its biggest problems, with fuel bills set to rise significantly as a result of stricter emissions controls coming in to force next year, according to participants at an industry event in London Wednesday.

Global sulfur limits for marine fuels are set to drop from 3.5% to 0.5% at the start of 2020, forcing most ship operators to switch from burning high sulfur fuel oil to new 0.5% sulfur blends. The new blends currently cost about $250/mt more than HSFO in Northwest Europe, and that spread could widen further as demand shifts at the end of this year.

At current crude oil prices the bunker industry may need as much as $4 billion more working capital to meet the higher fuel bills next year.