Hurricane Harvey - Flooding dries up US Gulf Coast refined product exports

Hurricane Harvey has caused devastation across the US Gulf, in this insight we look at the effects on the oil product markets. Around 4.5 million b/d of refining capacity has been shut down, severely reducing product supply, while demand is still seasonally strong. The closure of the Colonial pipeline has further limited imports into the US Northeast. To replace these lost volumes, traders are scrambling to secure supplies from other regions. Product crack spreads and refinery margins have surged following the disruption, which has further tightened a global refining system that was close to maximum utilisation. There are reluctant winners and losers depending on their exposure to the disruption caused. In this insight we assess the current outages in an historical context and look at the impact on refiners and the wider oil product markets.