By Jite Erabie
22 oil tankers are stranded off Texas coast as they are unable to offload their cargo due to port closures, according to the US Department of Energy.
The tankers are said to be carrying approximately 15.3 million barrels of imported crude oil near Texas ports.
The Port of Corpus Christi remains closed, however, the United States Coast Guard has issued a modified Zulu status for the Inner Harbor to allow for vessels with up to 20 feet draft to operate.
The port entrance has been blocked by a grounded drillship owned by Paragon Offshore and activities are reported to be underway to remove the beached vessel.
The port authority said that work is being carried out on expediting hydrographic surveys of the Corpus Christi ship channel, adding that the Corpus Christi and La Quinta ship channels are not obstructed by the incident with drill vessel Paragon I.
The port authority expects to restore normal business operations by September 4.
Freeport, Galveston, Houston and Texas City ports remain closed as activities ramp up on preparing to receive vessels. Louisiana Offshore Oil Port (LOOP) facilities have reported normal operations.
Six refineries in the Corpus Christi area, seven in the Houston/Galveston area, and two in the Beaumont/Port Arthur area have been shut down due to the hurricane. Five refineries in the Gulf Coast region are operating at reduced rates, DoE informed in the latest update.
Looking at the impact of the Hurricane Harvey on the tanker market, the temporary disruptions of oil production have already caused significant effects on the market.
“The biggest gains so far have been noted in the oil products markets, with the significant cuts in output bringing in a higher demand for commodities such as gasoline (with gasoline futures jumping as much as 7% reaching their highest level in more than two years) as the drop in supply has left many to scramble for new sources,” Allied Shipbroking said.
As a result, there has already been an upsurge in demand and a respective kick-up in freight rates in Europe.
“Product tankers have already started to see a significant amount of strengthening and given that these disruptions are likely to push for longer haul trades to strengthen it should also boost the overall supply/demand balance,” the shipbroker said.
Nevertheless, things have not been as positive in the crude oil trade, with the closure of refineries in the U.S. having also caused a drop in demand for shipments of crude oil.
“The disruption in port operations has also been the cause for the subdued activity being seen in the region over the past couple of days, while it has also taken out some fixing volume from other regions as charterers take a wait and see stance before placing any new orders they may had planned beforehand. The closure of ports surely was the cause for large delays in operations, causing, in turn, a percentage of the fleet for several sectors to be taken out of action,” the shipbroking firm added.
The final impact of the hurricane on the market is yet to be assessed.
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