Latin America scrambles for gasoline, distillates

Oil companies in Latin America are scrambling for gasoline and distillates cargoes for prompt delivery as damage from Hurricane Harvey hampers shipments from the US Gulf Coast.

The storm, one of the costliest to hit the US, has displaced more than one million people, with 50 feared dead from heavy rains that have also affected Texan refineries, ports and pipelines.

Latin America is the largest buyer of US fuels. It imports about 2.5 million barrels per day, an amount that has grown steadily in the last six years even as the region’s economy has deteriorated.

Imports typically come from the US Gulf Coast, but many Texan refiners affected by Harvey have been unable to keep up with supply contracts.

Some Latin American companies have resorted to the open market to locate cargoes in the US East Coast, Europe and Asia as shipping routes get scrambled and as US retail gasoline prices surge to their highest in two years.

Uruguay’s State-run ANCAP, a prominent importer of finished fuels, is seeking gasoil and gasoline cargoes for September and October delivery at its Jose Ignacio and La Teja ports, according to tenders that Reuters saw.

Ecuador’s State-run Petroecuador is offering to buy up to 1.89 million barrels of cutter stock to produce fuel oil, with deliveries starting in early October at its Esmeraldas terminal, according to a separate tender.

And crisis-hit Venezuela, which has more than 7 million barrels of fuel in floating storage from tankers that have not discharged while waiting for payments from State-run PDVSA, is now offering swaps to receive finished products such as diesel and gasoline while exporting residual fuels.

A cargo of gasoline blend stock anchored for weeks at PDVSA’s Puerto la Cruz terminal is about to discharge under one of the proposed swaps, a trader close to the deal said on Saturday.

If these swaps are successful, Venezuela could finally discharge a large volume of long-awaited fuel supplies for its domestic market.