Airlines Are Stepping Up Oil Hedges Before 2020 Shipping Rule Bites
- Longer-dated crude futures contracts set fresh 2018 highs
- Airlines, shippers locking in costs before shipping rules
Photographer: Paul Ellis/AFP via Getty Images
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Airlines are starting to hedge against the risk that fuel prices could be driven higher by rules targeting another industry’s environmental performance.
Brent crude for 2020 rallied in the third quarter, a period in which spot prices fell, as some carriers began seeking protection against higher fuel costs caused by rules to cut sulfur emissions from ships, according to Thibaut Remoundos, founder of Commodities Trading Corp. in London. The regulations, set out by the International Maritime Organization, take effect in January 2020.