Richmond Refinery Fire Could Decrease Regional Exports

The fire at Chevron’s 257 kbpd Richmond, CA refinery on Monday evening has removed 12% of the state’s distillation capacity, boosting clean product prices and prompting market speculation that increased product imports could bolster MR demand. Although the refinery situation remains unclear, the continued operation of secondary units and available spare capacity on the US West Coast suggest that a reduction in exports to the west coasts of Mexico and South America could balance the markets, potentially supporting MR trades out of the US Gulf as replacement supply. Download here