What's at Stake as the Shipping Industry Shifts to Cleaner Fuel

The video discusses the impact of the International Maritime Organization's new regulations requiring ships to use low-sulfur fuel starting January 1, 2020. This change affects the global oil market, particularly the demand for light sweet crude and diesel fuel. The video explores strategies for navigating these changes, including commodity and equity plays, and identifies potential winners and losers in the market. It also examines the short-term and long-term effects on refineries and the diesel market, highlighting the challenges and opportunities presented by the new regulations.

What is the maximum sulfur content allowed in ship fuel under the IMO 2020 regulations?

• 2.0%

• 0.1%

• 1.0%

• 0.5%

What are the two main strategies ships can adopt to comply with the new sulfur regulations?

• Switch to electric engines or use solar power

• Increase speed or reduce cargo weight

• Use low sulfur fuel or install scrubbers

• Use nuclear power or wind energy

Which type of crude oil is expected to see an increase in price due to the IMO 2020 regulations?

• Ultra-heavy crude

• Light sweet crude

• Medium sour crude

• Heavy sour crude

What is the expected impact on diesel crack spreads due to the IMO 2020 regulations?

• They will more than double

• They will remain stable

• They will slightly increase

• They will decrease significantly

What historical period is referenced as a precedent for the expected increase in diesel demand?

• 2000-2001

• 2005-2006

• 2007-2008

• 2010-2011

How much is the estimated annual increase in consumer spending due to the price difference between diesel and residual fuel?

• $100 billion

• $45 to $50 billion

• $25 billion

• $10 billion

Which type of refiners are expected to benefit the most from the IMO 2020 regulations?

• Refiners that can convert heavy crude to diesel

• Refiners that produce mostly gasoline

• Refiners that produce mostly jet fuel

• Refiners that focus on biofuels