A defining moment in the history of the oil-refining and shipping industries is at hand.
In less than two weeks, thousands of ships the world over will be forced to use fuel containing less sulfur in order to comply with global rules set out by the International Maritime Organization, Bloomberg reports.
Those who don’t could face penalties and even imprisonment. Ports are deploying drones to sniff out wrongdoers—literally. But fuel that complies with the new regulations is more expensive. The regulations are having a profound effect on oil refineries and the cost of seaborne trade is going to rise.
The cost of shipping a 20-foot box-load of goods from Latin America to Europe could rise by $26, according to IHS Markit, a consultancy firm. A weeklong passenger cruise could go up by $130 per cabin, the firm estimates. It’s still too early to say exactly who the biggest winners and losers will be among refineries because there are thousands of variables that shape their profit, but the change will have impact.
