Saudi flotilla facing minimal US discharge delays

Eleven of the 16 very large crude carriers (VLCCs) that have arrived at the US Gulf coast with Saudi crude this month have completed their discharges.

Only one of the recent arrivals, the Maran Canopus, appears to be delayed, despite predictions of significant delays because of anticipated port congestion.

The remaining four VLCCs are in the process of discharging.

The 2mn bl-capacity tankers were chartered in early March by Saudi state-owned shipping company Bahri days after the breakdown of the Saudi Arabia-Russia production-cut pact sparked an oil price war between the two countries that briefly drove oil prices into negative territory in late April.

An additional five of these tankers are still on their way to the US, four to the US Gulf coast and one is crossing the Pacific to the US west coast, according to vessel tracking.

The discharges come despite protests from senators Kevin Cramer (R-North Dakota), Ted Cruz (R-Texas) and other lawmakers representing oil producing states, who cast the shipments as an attempt to drive down oil prices and harm US shale producers. The senators last month asked the White House to block or impose tariffs on the shipments. But the administration never seriously contemplated the move, in part because of lobbying from US refiners.

"There are a fair number of refiners configured to run on sour crude you cannot always get domestically," said Chet Thompson, president of industry group American Fuel & Petroleum Manufacturers, disputing "a notion that if only we could restrict foreign crude that would make things more prosperous for upstream friends."

The American Petroleum Institute (API), which represents oil and gas producers, says it opposed imposition of tariffs on oil imports as it could lead to retaliatory actions.

"You do not want to do one thing that is meant to help American producers that would have terrible consequences on the back end," API president Mike Sommers says.

Of the 23mn bl of offloaded Saudi crude, 12.4mn has gone to the Louisiana Offshore Oil Port (LOOP), according to data from oil analytics firm Vortexa. LOOP is the only port in the US Gulf of Mexico that can accommodate a fully-laden VLCC. The rest of the discharged crude has been lightered onto smaller tankers, primarily Aframaxes, and found a home at onshore terminals along the US coast.

The second highest volume went to the Saudi Aramco-owned terminal Motiva Oiltanking, located in Port Neches, Texas, which received 2.9mn bl. This was followed by Marathon Galveston Bay in Texas City, Texas, which received 1.6mn bl, and Sunoco Logistics Nederland in Beaumont, Texas, which received 1.5mn bl.

By Nicholas Watt & Haik Gugarats