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More than 20 oil tankers stranded outside Texas ports due to storm

Tanker traffic is unlikely to resume soon as more oil and petrochemical refineries go offline

AT LEAST 22 oil tankers carrying around 15.3m barrels of crude oil are stranded near Texas oil ports, unable to discharge their cargoes as the ports are closed to vessel traffic, according to the latest US Department of Energy situation update.

With an increasing number of US Gulf oil refineries and petrochemical facilities going offline, and floodwater damage still being assessed, it is unlikely that either loading or discharging of tanker cargoes can be resumed anytime soon.

Additionally, the terminals are mandated to conduct a thorough post-storm damage assessment that must be submitted to the authorities for review before reopening.

Tropical Storm Harvey appears to have shifted northeast towards Louisiana, and rainfall in the Houston area may subside by Thursday, but record flooding means that terminal operations could take several days to resume and several weeks to return to normal.

The Texas Gulf Coast has 4.94m barrels per day of refining capacity and the Louisiana Gulf Coast has 3.7m bpd of refining capacity, while the US has 18.6m bpd of oil refining capacity in total, according to the US Energy Information Administration.

On Friday, before Hurricane Harvey made landfall, the energy department estimated that all six refineries in the Corpus Christi area were shutting down, and one refinery in the Houston-Galveston region area was operating at reduced rates.

They totalled 924,720 barrels per day of refining capacity, or around 5% of total US refining capacity. By Monday, this more than doubled to 2.2m bpd offline, equal to 11.8% of total US refining capacity.

At the last count, all six refineries in the Corpus Christi area, seven refineries in the Houston-Galveston area, and one refinery in the Beaumont-Port Arthur area were shut down or in the process of shutting down, the DOE estimated, citing public reports.

This was equal to 3.3m bpd of refining capacity, or 33.7% of total Gulf Coast capacity, and 17.6% of total US refining capacity.

The energy department estimated that in addition to closed refineries, 1.78m bpd of oil refineries were operating at reduced rates, equal to 18.3% of total Gulf Coast capacity and 9.6% of total US refining capacity.

This is bad news for both crude and product tankers, as refineries that were closed before the storm have no recovery timeline and refineries that were open have been damaged by floodwaters.

With inclement weather heading towards the Port Arthur and Lake Charles region, which has a heavy concentration of petrochemical facilities, chemical tanker markets now face prolonged disruption.

The new petrochemical plants hit were ExxonMobil’s ethylene plant in Beaumont, Dupont’s plant in Orange, Texas, and Flint Hills Resources’ Port Arthur plant, which have all been forced to close to carry out maintenance.

Major petrochemical producers in the Beaumont-Port Arthur region were idling or shutting crackers and associated units, oil pricing agency Platts said in a report.

It said the new outages along the Texas coast brought the percentage of offline US ethylene capacity to more than 50%, from Corpus Christi to the Louisiana state line.

ExxonMobil said in a statement: “Extreme weather and flooding caused by Tropical Storm Harvey have led to operational issues at our Texas facilities.” It added that its Baytown complex and the Beaumont refinery had been safely shut down as some units had been hit by adverse weather.

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