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Oil prices dipped this morning on a report that Donald Trump may be close to a deal with Iran that would unblock the Strait of Hormuz. Let’s see.

Meanwhile, US diplomats have been struggling with a longer-term maritime challenge: halting progress towards a global carbon pricing scheme for the shipping industry. But despite extraordinary pressure from Washington, nearly 60 countries are continuing to push for the plan to proceed.

Since the first one in 1959, meetings of the International Maritime Organization have generally involved arcane technical discussions of little interest to anyone outside the shipping sector.

Now, the body finds itself at the heart of a fiercely contested global stand-off over climate and energy policy. The debate, on full display at an IMO meeting in London last week, will decide whether the first global sector-wide carbon pricing system will come into being. It is also providing a fascinating test of the effectiveness of the Trump administration’s bare-knuckle diplomatic tactics.

“I don’t think the IMO is really prepared for this kind of controversy,” says Trevor Sutton, director of the trade and clean energy transition programme at Columbia University’s Center on Global Energy Policy. “In many ways, this is a stress test for the institution itself.”

‘Bully-boy tactics’

Trump — not normally known for his attention to the details of global shipping regulations — took to his Truth Social page last October to attack what he called a “Global Green New Scam Tax on Shipping”.

This was the IMO’s new Net Zero Framework, which was provisionally approved by member states at a meeting in April 2025 (the US stayed away). The new rule book would impose an effective carbon price on the global shipping industry, by charging a levy on ships that exceed benchmark emissions levels. That’s intended to incentivise investments in energy efficiency and cleaner fuels like ammonia, and help meet the IMO’s goal of net zero shipping emissions by about 2050.

The US punches below its weight at the IMO, reflecting its limited clout in the commercial maritime sector. US-owned ships account for less than 3 per cent of the world’s merchant shipping fleet, according to Unctad data.

So at last October’s meeting — where the new framework was due to be formally adopted — Washington resorted to extraordinary measures. In what one delegate called “bully-boy tactics”, it threatened countries with trade tariffs if they supported the new framework, and even to take action against individual officials. Amid the unexpected pressure, the decision on the new framework was postponed.

Shock wears off

Ahead of last week’s meeting in London, the head of the US delegation urged other countries to abandon work on the draft plan, saying there was “no prospect of achieving consensus around that proposal”.

But the text agreed last year has lived to fight another day, with delegates rejecting a proposal from the United Arab Emirates that it should be dropped from future discussions.

The meeting formally decided that the existing draft framework should remain the basis for further discussions — something that was publicly backed by 59 countries at the gathering, according to a tally by researchers at University College London.

“You could definitely tell that the shock effect of [US pressure] last October was gone,” says Felix Klann, shipping policy officer at the European non-profit group Transport & Environment.

Strong backers of the framework include the EU and UK (which are already moving to impose carbon pricing on shipping through their own emissions trading schemes); Brazil (which could stand to benefit from increased biofuel demand); and vulnerable states in Africa and the Asia-Pacific region (which could stand to benefit from the funds raised by the new carbon levies).

The scheme has also been backed by a large part of the global shipping sector. “The majority of the industry is pushing for a global regulation,” says Pernille Dahlgaard, who leads regulatory and policy work at the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, a think-tank linked to Danish shipping giant AP Møller-Maersk.

“The alternative will inevitably be a patchwork of different structures, which for an industry that operates globally will cause a lot of administrative challenges.”

The road ahead

The IMO has scheduled two working meetings in September and November, aimed at breaking the deadlock on this issue ahead of its next major gathering, which starts on November 30.

The framework’s backers will need to accept changes in order to get it over the line, says Evelyne Williams, a Columbia University academic and former US negotiator on carbon pricing at the IMO. One compromise proposal has come from Japan, which suggested replacing the carbon levy with tradeable carbon permits (which have a more limited role in the current draft framework).

Unlike some other oil-rich states that have been resisting the framework, the US could stand to benefit from the push to reduce shipping emissions, Williams notes. It’s the world’s biggest exporter of liquefied natural gas — the preferred choice of some shipping companies as a lower-emissions alternative to the fuel oil currently used by most vessels. Agricultural lobby groups are also keen, given the potential for expanded biofuel sales.

In a document submitted before the London meeting, the US outlined a set of proposals for a new “IMO Net-Zero Framework that can enable consensus”.

The paper included measures that may look unacceptable to proponents of the draft agreed last year. It proposed junking many key provisions of that framework, insisting that there should be no “economic levies or penalties”, and that the regulations “must not disadvantage any fuel types, including conventional fuels”.

But the fact that the Trump administration has felt it necessary to draw up a proposal for any sort of worldwide carbon emissions reduction plan — despite its wider resistance to global regulations and climate action — suggests a realisation that it won’t be able to derail this process completely.

“There’s still a momentum to this — there’s still a willingness to find a global framework,” said Tore Longva of shipping services company DNV, who attended last week’s negotiations. “The US and other [opponents of the framework] see that they cannot block it. So they have to engage.”

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