Egg On My Face -- September 5, 2019

Yesterday, I wrote:

Big energy story from yesterday. Just happened to catch it. Haven't seen it yet anywhere on the net (without googling). I'm going to wait an hour or so, and then if the story doesn't pop up I'll google it.

That "big energy story"?

Must have been bogus.

The "tip" came from a Starbucks "source." I was unable to find the story after an exhaustive search which suggests the "tip" was wrong.

The Starbucks "source" said that on Tuesday, September 3, 2019, the "IMO" voted unanimously not to extend the IMO 2020 rules. That, the "source" told me was the reason oil shot up in price. LOL. I have "egg" on my face. No story.

But, I told the "source," that if his story were true, there were be ways around it. First, there would be waivers, but even more so, some countries would simply ignore this European mandate.

And here it is, "The First County to Abandon IMO 2020," oilprice.com, via Yahoo!Finance:

Indonesia announced last week that it would not enforce the upcoming IMO 2020 rule requiring marine vessels to burn bunker fuels containing no more than 0.5 percent sulfur on its domestic shipping fleet.

The country thereby became the first “rat” to jump from the IMO ship. Indonesia’s actions may have a noticeable impact on at least the Asian bunker fuel market.

According to Reuters, the country made its decision in reaction to the high cost of new, cleaner fuels.

Instead of complying with the IMO mandate, Indonesian-flagged vessels can keep burning high-sulfur fuels within Indonesian markets. Reuters added that this policy would continue until the domestic supply of low-sulfur fuel increases. As one official stated, “We always put forward national interest as consideration [sic] in making the decision.”

I'm convinced every Asian country will follow suit.

So, what is IMO?

It is a "specialised agency of the United Nations."

My hunch is that IMO 2020 will be extended / relaxed / waivered on a case-by-case basis. If not, Asia wins, Europe loses, and the US falls somewhere in the middle.