US fuel exports recover after Harvey
European, Latin American buyers relieved over revival
Fuel exports from the US Gulf Coast have surged as refineries recover from weeks of disruptions due to Hurricane Harvey, offering respite to buyers in Latin America and Europe.
The gradual resumption of operations in the region that has become a major oil export hub has prompted a drop on both sides of the Atlantic in benchmark gasoline and diesel refining margins, which measure profit from converting crude into fuels.
Mexico’s state-run oil company Pemex bought gasoline from US Gulf Coast suppliers this week, according to shipping data. Mexico, which imports half of its gasoline, typically buys two cargoes of the fuel per day, mostly from the US Gulf Coast.
US outages came at a difficult time for Mexico as one of its refineries, the 190,000 barrels per day (bpd) Ciudad Madero, was undergoing maintenance. Pemex’s largest refinery, the 330,000 bpd Salina Cruz, was also halted after an earthquake damaged its electric system.
Salina Cruz was expected to restart by the third week of October.
Similarly, diesel and gasoline exports from the Gulf Coast to Brazil were slowly recovering. Also, shipping data showed that about 10 tankers carrying US diesel have also been booked to sail to Europe this week.
That followed around three weeks of almost no activity on the transatlantic route, a vital source of supply for Europe.
“Slowly but surely, exports from the US Gulf are coming back as more refining capacity returns,” a European trader said.
US refineries increased crude runs last week by 1 million bpd to 88.6 percent of total capacity, the highest rate since Harvey hit on August 25, according to weekly data from the Energy Information Administration (EIA).
The US Gulf Coast has in recent years become a major refined product export hub, shipping nearly 2.7 million bpd of gasoline, diesel and other fuels in May this year.