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Bloomberg
US oil refiners, in line for a windfall from new ship-fuel rules, are taking steps to lock in the change quickly, concerned it could fall victim to President Donald Trump’s
re-election push.
Under the new rules, many shippers will switch to low-sulfur fuels, boosting competition and, potentially, increasing the price of diesel, jet fuel and heating oil. The US Energy Information Administration forecasts that the effect will be “most acute†in 2020, just as the presidential campaigns kick into high gear.
Over the last decade, US refiners have invested heavily in the switch to cleaner fuels, giving them an edge over rivals ahead of the change, set to begin in January. After speculation surfaced last year that Trump might seek to delay the new standards, refiners are now aggressively touting their potential to increase US fuel exports.
It’s a message “likely to appeal to the Trump administration’s interest in energy dominance,†said Neelesh Nerurkar, vice president at ClearView Energy Partners in Washington.
A recently-formed lobby group is campaigning to make sure the change, known as IMO 2020, is implemented without delay. Its members include Valero Energy Corp. and BP Plc, and the key message is that the new rules neatly align with Trump’s energy agenda.
The refiners’ big concern is that energy dominance will take a backseat if the new rules lead to a spike in fuel prices headed into an election year. Trump’s options for lowering prices could include tapping the nation’s emergency crude stockpile or the Northeast Home Heating Oil Reserve. Banning fuel exports is seen as a more remote possibility.