In January 2020, the IMO (International Maritime Organization) regulation on sulfur content caps for Marine Vessels takes effect. The regulation is one of the most significant energy policy regulations in the past decade (at least). The rule caps sulfur content in all marine fuels at 0.5% (the current cap is 3.5%).
The impacts of this regulation could have an outsize impact, both because the supply versus demand shakeup at terminals and ports could affect availability, and because of the global nature of oil pricing. Marine vessels account for about 4% of global oil demand and handle around 80% of international trade volumes so impacts not only carry potential to hit other oil related industries (trucking, refining, etc) but also heavily trade dependent industries.
There has been concern about availability of very low sulfur fuel for vessels upon the regulations effective dates,and potentially substantial pricing impacts. A phase-in versus a "flipping the switch" plan for IMO 2020 has been proposed but rejected thus far.
This month (May) the IMO has a meeting where a phase in is again expected to be proposed. The Trump Administration has come out on the side of pushing for a phase in, likely in an attempt to prevent rising energy prices prior to the 2020 election cycle. There is some speculation that this may give the phase in policy more weight, fear that the U.S may withdraw from the deal entirely (ie Paris accords) may cause the IMO to agree to moderate policy to keep the deal on the horizon. We will have to stay tuned to see the results of the IMO meeting.
In the meantime, if you want to learn more about the IMO regulation and the steps being taken to comply with the rule by the Marine industry and on the refinery side, I wrote an article for Oil & Energy Magazine a few weeks ago that takes a deeper dive into the subject. You can read that here: "2020 Marine Regulations Raise Concerns"
(As an aside, March saw a market day impacted by the subject of IMO 2020 coming up for traders as they weighed it versus actual inventory indicators - sort of a fun indicator of what we may be looking at on the markets, as well as a link to a relatively exhaustive overview of the 2020 rule - here: "EIA Levels Push Gas Lower, Distillates Hang Steady Ahead of IMO Change Questions")