Hedge funds are devising investment strategies with exposure to the oil and shipping industries ahead of incoming regulations limiting the sulphur content of marine fuel. Incoming regulations, dubbed IMO 2020, will restrict the maximum amount of sulphur in shipping fuel to 0.5%, down from 3.5%. Some hedge funds are looking to take advantage of this transition by investing in oil or dry bulk freight derivatives. The industry is also facing a new round of EU legislation that would require all ships over 50 years old to be fitted with an on-board pollution control system (OPCS), which could cost up to €@@
Hedge funds are devising investment strategies with exposure to the oil and shipping industries ahead of incoming regulations limiting the sulphur content of marine fuel. Incoming regulations, dubbed IMO 2020, will restrict the maximum amount of sulphur in shipping fuel to 0.5%, down from 3.5%. Some hedge funds are looking to take advantage of this transition by investing in oil or dry bulk freight derivatives. Others have taken direct positions in refineries set up to produce a large volume of low-sulphur fuel.