How Mexico Will Feel Brutal Pain from Harvey’s Wrath Tom Terrarosa - TheStreet.com
go to original September 2, 2017

Tropical Storm Harvey has decimated the Gulf Coast of Texas, killing dozens of people, inflicting billions of dollars worth of structural damage and halting much of the nation's crude oil refining, and yet the damage from the most aggressive storm to hit the Texas coastline in more than 50 years may not end there.

To be sure, U.S. motorists will feel the pinch from rising gasoline prices as refined products supplies are shut in, and U.S. energy companies with Gulf of Mexico production or refining capacity, such as Exxon Mobil Corp, Valero Energy Corp, Anadarko Petroleum Cor. and Phillips 66, will grapple with disruptions in the coming weeks.

But as the United States in recent years has become a crude oil and petroleum product export market, ramping from some hundred thousand barrels of crude exports per month in late 2013 to more than 1 million barrels of crude exports this past May, it is becoming clear to industry watchers that Harvey will have global implications that extend far beyond Houston.

"Mexico and South America are going to feel real pain from this," Jeff Quigley, director of energy markets at consulting and analytics firm Stratas Advisors, told TheStreet. "They have become increasingly dependent on U.S. exports of product which can't get out because of port closures."

... Mexico imported some 879,000 barrels of petroleum products per day in May, or over 27 million barrels for the entire month, while a number of South American countries, including Colombia, Argentina and Chile are major importers of U.S. crude oil and refined products, according to the U.S. Energy Information Administration. The U.S. itself consumes 20 million barrels of petroleum products per day, EIA data shows.

Furthermore, Brazil, Mexico and Venezuela all send heavy crude to the U.S. Gulf Coast for processing, and according to Quigley, these products have a limited number of alternative markets.

The U.S. exported more than 25 million barrels of crude oil and refined petroleum products from Mexico in May, 23 million barrels from Venezuela and 4 million barrels from Brazil.

Read the rest at Yahoo Finance

Related: Harvey Hits Mexico's Energy Sector (El Universal)

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