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Bloomberg
Royal Dutch Shell Plc has made $1 billion from trading fuel oil this year, making it one of the standout winners from rules designed to make the shipping industry greener.
Shell said last month that it made substantial money in fuel-oil trading in the third quarter, but the company didn’t disclose the size of
the profits.
Shell traders celebrated hitting the $1 billion mark so far, likely the biggest by any one company in fuel oil this year, by ringing a bell on the company’s trading floor in London earlier this month, people familiar with the matter said. Shell declined to comment.
The fuel-oil market has been shaken this year by the so-called IMO 2020 new regulations that ban the
use of high-sulfur fuel oil, known as HSFO, to power ships. The rules are aimed at combating human health conditions such as asthma and environmental damage including acid rain. Prices are collapsing because the global shipping fleet, which burns more than 3% of the world’s oil, will instead have to consume very low sulfur fuel-oil (VLSFO).
Although better known for its oil fields, refineries and pump stations, Shell runs an in-house trading business that’s larger than the better-known independent oil traders like Vitol Group, Glencore Plc and Trafigura Group, handling 13 million barrels of oil equivalent per day.
In a conference call with analysts, Jessica Uhl, Shell’s head of finance, said the company’s traders benefited from “the change in the fuel standards†linked to IMO 2020, the name by which the ship-fuel rules are widely known.