Mexico loads up on US Gulf coast fuel

Market: Oil products
28/10/24

Mexico is ramping up gasoline and diesel imports from the US Gulf coast as the year-end holiday season approaches, signaling a likely decrease in domestic refinery runs.

Mexican state-owned Pemex's trading arm PMI last week put at least six MR tankers on subjects for US Gulf coast-east coast Mexico voyages amid 20-month low freight rates.

One of the tankers, the Seaways Kolberg, departed on 25 October to the Tuxpan port in Veracruz, carrying about 285,000 bl of ultra-low sulphur diesel (ULSD), preliminary Vortexa data show.

Two more tankers, the Coetivy and Gerakas, are expected to depart early this week to east coast Mexico, carrying a total of about 487,000 bl of gasoline.

The push follows a recent drop in imports during the peak of the hurricane season, when shipments were curtailed by storm-related disruptions. The rise also reflects potential challenges within Mexico's refining system.

At least three of Pemex's seven domestic refineries have undergone planned maintenance this month, including the 330,000 b/d Salina Cruz refinery, according to market sources.

Additionally, the new 340,000 b/d Olmeca refinery stopped processing crude for most of October, as its crude distillation unit (CDU) again experienced issues.

Minatitlan and Cadereyta refineries will undergo CDU maintenance, taking down as much as 270,000 b/d of crude processing in the first week of November, according to market sources.

President Claudia Sheinbaum's administration inherited the unfulfilled goal of gasoline and diesel self-sufficiency. While Mexico has increased fuel output at its domestic refineries, the country still relies on imports for over 60pc of its gasoline and diesel demand, mainly from the US Gulf coast.

Mexico's fuel imports will likely increase in the coming weeks, as November and December traditionally bring a spike in fuel demand in the country, with holiday travel and seasonal festivities driving up consumption.

By Antonio Gozain

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