Tesoro to ship jet fuel from Asia to US West Coast
Tesoro Corp, the largest independent refiner on the U.S. West Coast, is set to ship a jet fuel cargo from Asia to the United States, traders said, marking the first such move by the company this year, Reuters reports.
Tesoro has provisionally booked the vessel Overseas Limar to carry 35,000 tonnes of jet fuel, to be loaded on September 5 from South Korea, towards Hawaii or the U.S. West Coast, shipping fixtures showed.
The company only previously did the route a few times last year and regularly two years ago, traders said.
Tesoro could not immediately be reached to confirm the fixture.
Profitable arbitrage economics to ship jet fuel from North Asia to the United States after a fire shut a crude unit at California's second-largest refinery has encouraged traders to aggressively look to ship cargoes for the route.
A crude distillation unit at Chevron's 245,000-barrels-per-day (bpd) refinery in Richmond, California, is expected to be shut for up to six months, with the refinery continuing to produce 50 percent of its capacity for transportation fuel.
The supply shortfall has caused jet fuel prices in the United States to shoot up, in turn attracting cargoes from the east.
At least 120,000 to 150,000 tonnes a month of jet fuel are set to be shipped from Asia to the U.S. West Coast from late-August, up from the usual 30,000 tonnes a month before the fire, traders said.
But fresh fixtures have slowed slightly this week compared to last week on limited ship and cargo availability.
Tesoro used to ship about 30,000 tonnes of jet fuel a month from South Korea to the U.S. West Coast about two years ago, before scaling back on the route, traders said.
The company likely purchased a spot cargo from a term buyer of jet fuel from one of the South Korean refiners, as spot cargoes from refineries are currently limited for September, they added.
Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of about 665,000 bpd, according to the company website.
