IMO Low Sulfur Rule Could Mean Bumpy Road Ahead For Trump, Truckers


Crude oil and diesel prices have been on the march lately, with the former up nearly 40% since late December. The Brent international benchmark price for oil topped $70 per barrel last week for the first time in months, while the U.S. West Texas Intermediate price is closing in this week on $65 a barrel.

Retail diesel prices, now averaging $3.08 a gallon, should be watched closely as the 2020 deadline for implementing new international marine fuel standards draws near. The International Maritime Organization (IMO) environmental regulations, aimed at lowering the sulfur content in marine fuels, could create a supply gap and price spike for similar grades of petroleum products, including diesel.

Diesel would be the first hit as a rising portion of the pool of distillates used to produce over-the-road diesel will be diverted into making either more of a product known as marine diesel or to be blended into a new family of products known as very low sulfur fuel oil (VLSO). Both would substitute for the high-sulfur fuel oil, also known as bunker fuel, that now powers most vessels.

The IMO’s stricter sulfur rules could spell bad news for the American trucking industry, and potentially provide an unwelcome talking point to the opponents of President Donald Trump as he seeks re-election in the November 2020 elections.

Trump has won praise from the U.S. energy industry for his deregulatory domestic agenda and his commitment to American “energy dominance,” particularly in fossil fuels, a sector where the United States has become the world’s largest oil producer and a major exporter.


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