Soaring Freight Rates Give US Refiners Edge As Crude Discounts Widen
By Vallari Srivastava and Sumit Saha Nov 6 (Reuters) – The Iran conflict has sent tanker rates soaring, forcing sellers to deepen discounts on heavy crude grades and giving US Gulf Coast...
The Houston Ship Channel and adjacent refineries, part of the Port of Houston, are seen in Houston, Texas, U.S., May 5, 2019. REUTERS/Loren Elliott
Nov 6 (Reuters) – The Iran conflict has sent tanker rates soaring, forcing sellers to deepen discounts on heavy crude grades and giving US Gulf Coast refiners a cost advantage over Asian rivals, executives said after reporting bumper third-quarter profits.
Security threats around the Strait of Hormuz, a key maritime chokepoint through which about one-fifth of global oil and liquefied natural gas supplies passed before the war started, have disrupted tanker traffic, while higher war-risk insurance premiums and longer voyages have driven upshipping costs.
The disruption particularly benefited US Gulf Coast refiners, which could buy discounted heavy crude produced closer to home, including from Canada and Venezuela, while Asian rivals faced sharply higher freight and insurance costs to import similar grades through longer and riskiershipping routes.
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