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Spotlight: Big changes to oil export flows in the USGC region

This Spotlight from S&P Global Platts Analytics was first published April 27, 2020

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Crude oil exports out of the US Gulf Coast have been holding up relatively well given the severe curtailment in global refining demand. The key to maintaining those volumes has been finding new outlets for US crude, which has mostly been for the purposes of storage.

One destination that has seen a big uptick in imports of US crude is St. Croix. This is the location of the Limetree Bay refinery that is expected to start up in the third quarter of this year.

USGC exports to Latam/Carib (7 day Mavg)

The old HOVENSA refinery location has a lot of storage capacity and these purchases are likely advantageous ones being made at bargain nominal prices and positive storage economics ahead of the refinery's commissioning. Since the beginning of April, we have seen approximately 6.5 MMBbls head to St. Croix.

Another area of interest has been Saldanha Bay. This popular storage site in South Africa has seen strong interest as storage economics have come into play. The site has been predominantly taking volumes of West African crude, but we have seen three vessels -- each carrying around 1 MMBbls -- taking crude there from the USGC over the past month.

We also believe as much as 10 MMBbls have been deployed to other storage locations in the Caribbean and/or been taken aboard vessels for the purposes of floating storage.

All told, somewhere around 20 million barrels (~650 MB/D) of US export demand over the past month has been for the purpose of oil storage somewhere other than commercial inland stocks along the USGC.