So, the inevitable has begun. Prices for US domestic crude have moved substantially towards the cost of Brent. Why? Pipelines long planned are coming online to help move the domestic stuff to the refineries on the gulf coast. The bottleneck in Cushing is opening up.
That should help decrease our reliance on foreign oil... right? Well, maybe not right away. One major East Coast refiner has recently adjusted its crude slate to include more foreign oil. With no pipelines to the east coast and with the discount disappearing, the cost of transporting slightly more expensive oil is cheaper than transporting slightly cheaper domestic crude by rail. The cost of rail transport is also driving a high charter rate for Jones Act tankers that can move crude from the Gulf to the East Coast refineries.
This circumstance will probably be temporary as long as we continue to increase our domestic oil production and get some crude pipelines to the east coast. At the very least, the oil terminals on the East Coast are beginning to see higher occupancy levels.
So where does PortVision fit into all of this? PortVision provides the supply chain visibility, operational support, and analysis to help you profit from this changing environment. Want to continue the conversation? Then contact us today