01 September 2017, News Wire — The crippling of the U.S. Gulf Coast refining hub by Tropical Storm Harvey roiled global oil markets on Thursday as traders scrambled to buy gasoline and diesel from distant markets to avert supply shortages in the United States, Mexico, and Brazil.
A slew of gasoline tankers has been booked over the past two days out of Europe to the United States and Latin America, with around 12.5 million barrels expected to leave the region in the first half of the month, sharply higher than usual flows, according to traders and shipping data.
Mexico’s state-run oil company Pemex, which heavily relies on U.S. fuel supplies, has over the past week booked at least seven cargoes of gasoline, or around 2.1 million barrels, from Singapore, Canada, and Europe, according to the same sources.
In another sign of how Harvey is opening rarely used trading routes, at least three tankers carrying diesel have been booked out of Europe and the Mediterranean to go to Brazil, which also usually draws large volumes from the U.S. Gulf Coast.
Mercuria, Glencore, and Castleton booked the vessels, according to traders.
Europe typically imports diesel from the U.S. Gulf Coast.
Around one-quarter of the U.S. refining capacity, or 4.4 million barrels per day, has been shuttered over the past week as Harvey pummelled Texas, sending gasoline prices to a two-year high of above $2 a gallon.
The disruption has been made worse as the Colonial Pipeline, the biggest U.S. fuel system, is set to shut its main lines to the Northeast by Thursday due to outages at pumping points and lack of supplies from refiners.