En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Irma worsens Latin America's fuel supply crunch

 

 




By Marianna Parraga

HOUSTON
Petroleumworld 09 08 2017

Hurricane Irma has shut down oil terminals across the northern Caribbean, worsening a fuel supply crunch in Latin American countries that have struggled to meet demand since Hurricane Harvey disrupted shipments from the U.S. Gulf Coast last month.

Latin America had already been scrambling for almost two weeks to find cargoes because of Harvey, which caused massive flooding in Texas and Louisiana, shutting down oil ports, refineries and production platforms.

Irma, which is being followed by two other hurricanes in the Atlantic - is threatening Caribbean refineries, terminals and storage facilities.

There is over 100 million barrels of storage capacity in the Caribbean, which is crucial for those nations because of limited ability to refine crude, and also as supply for South American nations including Brazil, Venezuela and Colombia.

Several oil trading firms had moved a portion of their U.S. fuel inventories to the Caribbean ahead of Harvey so they could keep selling cargoes to Latin America, traders from two companies told Reuters.

Those barrels are now locked in terminals in St. Eustatius, Puerto Rico and the U.S. Virgin Islands, as Irma, a Category 5 storm with winds of 185 mph (295 kph), is expected to hammer the region for several more days before turning north.

“Irma is arriving in a bad moment. Not all oil storage facilities in the Caribbean have closed, but vessel traffic is difficult in the middle of the storm. It will get worse before getting any better,” said a trader from an oil firm that rents tanks in St. Croix.

U.S.-based Buckeye Partners, the largest owner of oil storage facilities in the Caribbean, with 41.1 million barrels of capacity, said on Wednesday it shut its Yabucoa terminal in Puerto Rico. It is monitoring Irma's path to decide if it also has to close its largest terminal in the Bahamas.

NuStar Energy on Tuesday closed its 13 million-barrel Statia terminal in the small island of St. Eustatius.

Firms leasing tanks in closed terminals in St. Eustatius, St. Croix and Puerto Rico include traders Vitol, Glencore , Novum Energy and Freepoint Commodities, and Venezuela's state-run PDVSA, China's Sinopec and Russia's Rosneft, according to the sources and Reuters vessel data.

As traders worry about Irma's impact on their inventories, others see longer-term potential consequences from this or other storms, as both Jose, now in the Atlantic Ocean, and Katia, off Mexico's coast, strengthened to hurricanes on Wednesday.

“If a hurricane with Irma's intensity strikes a terminal tank farm, the force of the storm at the eye wall will have destructive impact on the storage tanks, which are typically not designed to withstand those forces,” said Ernie Barsamian, chief executive officer of the Tank Tiger, a terminal storage clearinghouse.

Mexican state-run oil company Pemex said on Wednesday that its facilities were not in danger so far, but it was monitoring Katia's path to decide if further action is needed.

FEWER OPTIONS

Fuel importers such as Mexico and Brazil have secured supplies in recent days from the U.S. East Coast, Europe and the Caribbean, according to traders, regulators and oil firms.

But those options are running short amid growing regional demand and limited offers from Texas refiners as ports have been slow to reopen for large vessels.

The only option traders see for desperate buyers in coming days is to divert fuel cargoes from countries such as Brazil, which bought diesel in excess, or Venezuela, which cannot pay for all the fuel floating near its ports because of financial problems.

Companies from Uruguay, Ecuador and Peru are seeking spot cargoes on the open market, but few providers are willing to participate, traders said.

“I cannot use my inventories in the Caribbean in this moment to supply third parties,” one of the traders said.

Dominican Republic refining firm Refidomsa, which declared force majeure last week on fuel deliveries, said on Wednesday it was rationing fuel from its 34,000-barrel-per-day Haina refinery, giving it enough inventory for 20 days.

Most Caribbean refineries are dependent on U.S. light oil since large regional crude producers such as Mexico and Venezuela have cut exports to some neighbors.



Story by Marianna Parraga; Reporting by Marianna Parraga in Houston, Jorge Pineda in Santo Domingo, Ana Isabel Martinez in Mexico City, Linda Hutchinson in Port of Spain, Trinidad, and Alexandra Alper in Rio de Janeiro; Editing by Peter Cooney from Reuters.

reuters
.com
09 07 2017

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 



Sept. 14-15,
Accra, Ghana

 

Nov 13-14 ;
Mexico City, Mexico

 

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.