March 2, 2024
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OIL & GAS

U.S. Gulf Coast Gasoline Glut Spurs Resumption of Exports to Australia, Mozambique

A surplus of cheap gasoline along the U.S. Gulf Coast has reignited exports to distant markets like Australia and Mozambique, capitalizing on the abundant supply.

Reuters revealed that as of the end of December, U.S. gasoline demand hit its lowest point in a year, leading to a surplus in stocks in PADD 3 along the Gulf Coast. Refiners increased production after fall maintenance outages, resulting in a 9.5% increase in stocks compared to the same period the previous year.

The STI Madison vessel, chartered by TotalEnergies’ Atlantic Trading & Marketing, loaded approximately 700,000 barrels of gasoline from Marathon Petroleum’s Garyville, Louisiana, refinery on December 15. The cargo is expected to discharge in Sydney by the end of this month, signaling the first U.S. gasoline cargo to Australia in nearly three years and the first from the U.S. Gulf Coast in over four years.

The surplus has made U.S. gasoline more competitive globally, prompting the STI Mighty vessel to carry about 170,000 barrels of gasoline from Houston to Beira in Mozambique. This shipment is the first gasoline delivery to Mozambique in four years.

Despite this resurgence in exports, industry experts anticipate that U.S. gasoline shipments to Australia may not significantly increase as the price difference between the East and West markets is likely to narrow.

“U.S. Gulf Coast gasoline is very cheap right now,” a Singapore-based gasoline trader said. “This could be an opportunistic trade,” the trader added.

The move reflects the dynamic global energy trade influenced by regional supply and demand imbalances.

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