Product Price Hike Concerns Could Turn Trump's Attention to IMO 2020

Wednesday January 23, 2019

The US president may well take an interest in the International Maritime Organisation's 2020 sulfur cap on marine fuel once he realises that higher product prices could hurt consumers, a Washington-based analyst has said.

Speaking at an Argus Media oil event in Houston, Rapidan Energy president Robert McNally said that if the IMO cap is not on the White House agenda, that could change.

As soon as an aide explains to President Donald Trump how it could increase heating oil prices sharply for voters in states he needs badly in 2020, like Pennsylvania, or could impact fuel prices at the pump, it will become a priority.

"A US president will do almost anything to avoid a fuel price spike," McNally said.

On the extent of refined product price rises, McNally sided with the Paris-based IEA and its predictions of a 20-30% increase in diesel prices versus a more conservative single-digit price increase predicted by the US Energy Information Administration as it appears refiners will be hundreds of thousands of barrels per day short of supply.

In October last year, the Trump administration indicated it was in favour of a slower start to IMO2020. However, a move to push for an experience building phase to the impending rule change was rejected at IMO.