Baltimore bridge collapse to raise retail fuel prices

The collapse of the Francis Scott Key Bridge in Baltimore, Maryland, is more likely to increase regional gasoline prices than diesel due to additional freight costs and certain route restrictions.

Suppliers in the region have so far signaled that the effect on broader markets will be minimal, but regional prices will likely rise, especially as peak summer demand season begins with Memorial Day weekend in late May.

The bridge closure could pose more problems for gasoline supply than diesel, since gasoline cannot be transported through the Fort McHenry (I-95) and Baltimore Harbor (I-895) tunnels — the two other major roads that cross the Patapsco River at Baltimore — while there are no restrictions on diesel, according to the Maryland Transportation Authority (MTA).

Fuel wholesaler Global Partners said yesterday that it would like to see hours of service waivers for trucking in the region to minimize fuel supply disruption to customers, but the Federal Motor Carrier Safety Administration (FMCSA) is yet to issue one.

Elevated retail prices are likely to be limited to the immediate Baltimore area but could spill over into neighboring markets should trucking markets remain tight due to rerouting, market sources told Argus.

Fuel markets in eastern Maryland can be supplied by PBF's 171,000 b/d Delaware City, Delaware, refinery and two further plants in Pennsylvania — Monroe Energy's 190,000 b/d Trainer refinery and PBF's 160,000 b/d Paulsboro refinery.

To the north, United Refining runs a 65,000 b/d plant in Warren, Pennsylvania, and along the Atlantic coast Phillips 66 operates the 259,000 b/d Bayway refinery in Linden, New Jersey.

PBF, Monroe and United did not immediately respond to a request for comment on whether the bridge collapse is affecting refinery operations. Phillips 66 declined to comment on commercial activities.

Still, the five nearby refineries — representing all the Atlantic coast's 850,000 b/d of crude processing capacity — are unlikely to see their operations curtailed by limits in shipping products to Maryland.

With no refinery in the state of Maryland, most fuels are delivered to Baltimore by Gulf coast refiners on the Colonial Pipeline.

Global Partners, which operates a terminal just west of the collapsed bridge, said yesterday it is primarily supplied by the pipeline and expects product flows to continue.

Several terminals in the Baltimore Harbor and the nearby Port Salisbury can also receive small vessels and barges of road fuels from Delaware and Pennsylvania, according to the Maryland Energy Administration (MEA).

The Port of Baltimore — which remains closed since the collapse — took delivery of 24,000 b/d of gasoline and under 2,000 b/d of distillates from barges and small vessels in 2019, about three percent of the Atlantic coast's refining capacity.

"A closure of the Port of Baltimore while the Colonial Pipeline is open would not significantly disrupt fuel supply," the MEA wrote in a 2022 analysis of liquid fuels supply in the state.

By Nathan Risser