The True Edge
A Navarik Market Update
Whereas Hurricane Harvey knocked out the bulk of US refining capacity and Hurricane Irma displaced untold numbers of people in a major consumption region, Hurricane Maria has arguably so far escaped the attentions of the oil and gas market. The humanitarian cost of this storm has so far proved tremendous, when one considers the damage in Dominica and Puerto Rico, but the region also contains strategic storage and terminal facilities that may also be disrupted, leading to knock-on effects in other areas.
The storm’s path has so far taken it across facilities in the US Virgin Islands (13 million barrels in St. Croix), St. Eustatius (also 13 million barrels), and Puerto Rico (mainly local import facilities in Yabucoa and Guyanilla). It is too soon to determine how long these facilities will be offline, but the main effects are likely to be on fuel oil cargoes that will be diverted as well as on crude cargoes that would otherwise be put into storage before being forwarded elsewhere.
Looking forward, what path the storm takes from here is crucial. The region’s predominant storage facility at Freeport, Bahamas is at present presumed to be safe from the brunt of the storm. This is because Freeport is not only far enough north that the storm may have time to weaken before making landfall, but also on the western end of Grand Bahama whereas the eye of the storm may pass well to the east of the island. If Freeport is in fact hit hard, expect major disruptions to the Caribbean crude market, with ripples outwards of unknown duration.
Navarik Data is uniquely placed to offer insights into when cargoes bound to or from these facilities begin to return to normal.
Colin McCann is an Oil & Gas analyst with Navarik Corporation. The Navarik Data Products team analyzes Navarik's proprietary data sets and external sources to provide insights into the oil & gas shipping market. The resulting analysis enables physical and paper traders to see ship movements across the barrel before anyone else in the market.
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