24 June 2019
The fire raged for three days and the loss of petroleum product production will have an impact on the product tanker trades, according to Poten & Partners senior analyst Erik Broekhuizen.
He noted that “As there are no crude oil pipelines to these refineries, US crude needs to be supplied by Jones Act tankers or by rail, which are both relatively expensive options and are only cost effective if there is a large discount for domestic crude oil.”
“Petroleum products are supplied to the northeastern market through a combination of local production, imports from the US Gulf (mainly via the Colonial Pipeline) and imports from foreign refineries, mainly in Canada and Europe.”
The fire will reduce the need for crude oil being shipped by pipeline and train to the refinery and shut the door on any overseas imports, although it is not clear if force majeure has been declared.
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