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An oil tanker sits beside transfer pipes at a terminal as it prepares to unload its cargo of fuel on July 4, 2018 in Zhoushan, China.
A much-anticipated shipping revolution could spark a dramatic upswing in diesel fuel demand over the coming months, energy analysts have told CNBC.
New rules coming into force in less than 18 months’ time are seen as a source of great concern for some of the world’s biggest oil producers. That’s because the global shipping industry is widely thought to be ill-prepared for the looming sea change.
On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships.
Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5 percent, compared to levels of 3.5 percent at present. The most commonly used marine fuel is thought to have a sulfur content of around 2.7 percent.
“The demise of diesel has been well documented over recent years, as global efforts to curb greenhouse gas emissions continue to power the rise of hybrid and electric vehicles,” Richard Robinson, manager of the Ashburton Global Energy Fund, told CNBC via email.
“However, far from a diesel death knell, we expect to see a resurgence in the use of the fuel,” he added.
