Weather Derivatives Explode 260%: Inside the $25B Climate Risk Transfer Market

How hedge funds and energy companies are monetizing Mother Nature’s volatility — and why 2023 marked a turning point

The Setup: When Weather Becomes a Tradeable Asset

Star Group, a U.S. heating oil distributor, faced a problem in early 2023: temperatures in New York City had just recorded the warmest winter in 123 years. For a company whose revenue depends on cold weather driving heating oil demand, this should have been catastrophic.

Instead, Star Group collected $12.9…