US Gulf coast conventional 87 finished gasoline prices reached their highest point in over two years on Thursday after the US-Iran conflict led a spike in export demand.
Both crude and refined products supplies continued to face a bottleneck after joint US and Israeli attack on Iran starting on 28 February led to the closure of the strait of Hormuz, driving global buyers to turn to the US Gulf coast to secure gasoline.
Regional conventional gasoline prices hit $2.895/USG on Thursday, up by 42.87¢/USG on the week to highs not reached since late September 2023. The Gulf coast had already exported a record 918,000 b/d of gasoline in February, the highest level for any February since Kpler began recording data in January 2016, in an attempt by refiners to minimize a glut in regional winter-grade gasoline inventories ahead of the summer driving season.
Though exports had driven regional gasoline inventories to three-month lows of 85.1mn bl in the week ended 6 March, Energy Information Administration data show, those levels had climbed past year-before levels by 9.2pc.
However, continued strength in exports, especially as the US weighs waiving Jones Act domestic shipping restrictions, has led to expectations of further declines in inventories ahead of the summer driving season when road fuel demand is at its highest and driving conventional gasoline prices higher as a primary benchmark price for exports and domestic blending.
The Jones Act mandates that vessels carrying shipments between US ports must by US-built, crewed and owned.
Gulf coast gasoline exports were 1mn b/d in the week ended 6 March, after the US began strikes on Iran, an increase of 9.7pc on the week. Compared with the same week last year, exports were 39.6pc higher.
Furthermore, the potential waiver of the Jones Act attracted more charters of medium range tankers for Gulf coast loading.
