<article><p class="lead">The crude tanker market in the US Gulf coast may receive a boost from a heavier-than-normal spring maintenance season at refineries, with more crude oil likely available for export.</p><p>Significant turnaround work is <a href="https://direct.argusmedia.com/newsandanalysis/article/2412062">scheduled for the first quarter</a> at refineries with a combined crude throughput capacity of 1.85mn b/d, following above-average run rates in 2022 amid high margins spurred in part by the war in Ukraine. About half of that capacity is on the US Gulf coast. </p><p>The planned maintenance comes as China, the world's largest crude importer, reopens from strict Covid-19 lockdowns, adding to the global appetite for US crude. The combination could mean increased demand for crude tankers along the coast of Texas and Louisiana. </p><p>The forward freight agreement (FFA) rate for transatlantic Aframax voyages from the US Gulf coast is $5.23/bl in January and $5.67/bl in February, indicating the futures market expects the rate to climb from $5.36/bl on the spot market on 23 January. The FFA rate for very large crude carriers (VLCCs) on US-China voyages over the same period is $3.98/bl and $3.88/bl, respectively, in range with $3.99/bl on the spot market on 23 January. </p><p>The maintenance also comes against the backdrop of rising US crude production, potentially adding to any excess crude supply in the US Gulf coast. US crude production was about 12.13mn b/d in the two-month period ending 13 January, compared with 11.7mn b/d in the same period a year earlier, according to Energy Information Administration (EIA) data.</p><p>With China reopening, VLCCs, which carry about 2mn bl of crude, will still compete with Suezmaxes (about 1mn bl) and Aframaxes (about 700,000 bl) for exports. </p><p>"In theory, how hard the VLCC scrounging goes will depend on if more sweet or sour is added to exports," a shipbroker said. "Sour increases the scrounge factor as that is more likely to go to Asia."</p><p>ExxonMobil's 250,000 b/d expansion at its refinery in Beaumont, Texas, which is expected to start up in February, <a href="https://direct.argusmedia.com/newsandanalysis/article/2406327">will also compete for WTI barrels</a>, with capacity there set to top 600,000 b/d, likely crimping US crude exports. </p><p class="bylines">By Tray Swanson</p></article>
