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Oil cargoes to Venezuela move to LATAM countries as hurricanes extend disruptions


By Marianna Parraga

Petroleumworld 09 19 2017

Shippers are sending oil cargoes originally bound for Venezuela to other spots in Latin America and the Caribbean, in advance of coming hurricanes that threaten to further disrupt oil flows in the region, according to traders and Reuters data.

After Hurricanes Harvey and Irma caused massive flooding and damage in Texas and Florida, fuel tankers floating off Venezuela's coast have been shifted elsewhere, largely because the cash-strapped state firm PDVSA cannot pay for the cargoes.

The latest threat for the Caribbean is Maria, now a Category 3 hurricane, which currently boasts wind speeds of 125 miles per hour (200 km per hour). The storm is expected to get stronger as it moves through the Leeward Islands later on Monday. Shippers have responded by moving supplies in the region around so they can discharge and supply key ports before it hits.

Hurricane-related supply interruptions may limit exports to Latin America and the Caribbean, which imports 2.5 million barrels per day (bpd) of U.S. refined products, mostly from the Gulf coast.

As with Harvey, the first hit from Maria looks to be Venezuela's PDVSA. The unpaid fuel floating near its ports is shrinking, as tankers are sent to places where those who need supply now can pay for it and are not hampered by PDVSA's financial problems.

Six tankers carrying a total of about 1.8 million barrels of ultra-low sulfur diesel (ULSD), the gasoline additive MTBE, and other refined products have been shifted since Sept. 3 from Venezuela's coast to storage facilities in Panama and the Caribbean, according to Thomson Reuters vessel tracking data.

The list includes a ULSD-cargo on tanker Vukovar chartered by BP Plc that had been waiting to discharge since July 10. The vessel set sail over the weekend to Point Lisas, Trinidad, shipping data shows. Another tanker carrying European fuel sailed back to Europe on Sep. 12.

The tanks and docks at major Caribbean oil terminals act as a distribution hub for U.S. fuel exports and Latin American crude shipments, but they have only been working intermittently since early September. Irma and Jose forced some facilities to shut in recent weeks.

NuStar Energy LP's 13-million-barrel Statia terminal in St. Eustatius remains closed after Irma caused damage to some tanks, the company said on Monday. An assessment of the facility was put on hold last week due to Hurricane Jose.

The firm activated a new hurricane response plan ahead of Maria, which could hit other islands with oil facilities including St. Lucia, Puerto Rico, the U.S. Virgin Islands and Bahamas, according to the U.S. National Hurricane Center (NHC).

On the U.S. East Coast, shipping is still threatened by Jose, which is producing “dangerous turf and rip currents,” the NHC said. Refiners and shippers in this area had sent supply to some Latin American countries in recent days, including Mexico, which has two refineries offline after a strong quake earlier in September.

As some cargoes find new buyers, other tankers have temporarily moved to South America's north coast waiting for the weather to improve near Caribbean terminals, which can store as much as 100 million barrels of crude and products.

“Fuel importers in Latin America keep looking for supplies, while some companies that typically export spot cargoes of gasoline or diesel have canceled tenders to store the fuel instead,” said a trader from an oil-producing company.

State-run oil companies offering to buy fuel include Uruguay's ANCAP, Colombia's Ecopetrol, Costa Rica's Recope and Ecuador's Petroecuador.

Even though all Texas oil ports have reopened since Harvey passed, most still have depth restrictions, affecting their ability to receive large tankers for imports and exports.

Story by Marianna Parraga in Houston; Reporting Susan Heavey in Washington and Ana Isabel Martinez in Mexico City; Editing by Lisa Shumaker from Reuters.

reuters.com 09 18 2017

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