Puerto Rico imported its third-highest monthly volume of gasoline since 2017 in January and kept an even brisker pace into February, showing resurgence for the US territory decimated by economic troubles and population loss from hurricanes Irma and Maria and then the pandemic.
US Customs data Feb. 16 also showed only 21.7% of Puerto Rico’s 2.6 million barrels of imported regular or premium gasoline came from the Baltics in January, a switch from 41.4% in full-year 2021 and 52% from 2016-2021 and a reflection of tensions in Ukraine affecting Estonia, Lithuania and Latvia.
Baltic gasoline exports have been limited in recent weeks as Russia retains more gasoline to supply its domestic market, while production has slowed due to run cuts at natural gas-powered refineries in the region as a result of high natural gas prices.
But European natural gas prices slid on the apparent easing of tensions between Ukraine and Russia, which could increase Baltic production and further open the arbitrage to Puerto Rico.
A shipping source in the Americas said Puerto Rico rarely pulls from the US because of expensive shipping requirements for Jones Act ships, but it has become more active across the ocean this year for gasoline.
“The barrels into PR, we don’t see fixed on vessels on our side because it’s a US territory, so it would have to move on Jones Act vessels,” he said. “Most of the product comes from Europe, from where we have been seeing more and more ships arriving in PR over the past few months.”
Rising imports come despite 10% less population
It was Puerto Rico’s highest gasoline import volume for a January since 2017, when it took in 2.73 million barrels. The Caribbean island did pull 2.64 million barrels in February 2019 and 2.62 million in April 2021. But otherwise, the last top import months happened in 2017 when it drew more than 3 million barrels in October and November and averaged 2.21 million barrels that year, the highest since S&P Global Platts started receiving customs data in 2015.
The peak months happened just after the category 5 hurricanes in September effectively destroyed the power grid and caused fuel shortages and distribution problems. With the hurricanes and pandemic adding to its woes, Puerto Rico’s already-slipping population dropped from 3.12 million people in 2017 to 2.74 million at the start of 2022, according to UN data.
Gasoline use has returned to normal despite 10% fewer people, and continued apace in February. In the last arrival, Trafigura unloaded 439,525 barrels of gasoline Feb. 13 for its Puma Energy subsidiary from the LR-sized Spruce 2 that loaded in Estonia. Puerto Rico has imported 1.39 million barrels halfway through February, it fastest pace on record for the month, with more cargoes on the way.
Platts trade flow software cFlow showed three more typical MR-sized vessels capable of carrying 300,000 barrels on their way: BW Egret just out of Togo carrying gasoline, the Ardmore Explorer days out of Portugal carrying gasoline and the Hellas Revenger days out of Amsterdam likely carrying gasoil. Diesel and gasoil imports have remained strong in the Caribbean and South America despite high prices, but Puerto Rico has only brought in 791,000 barrels in the first 45 days of 2022.
In 2021, Vitol, Shell, Trafigura, Gunvor were the main suppliers, shipping in 71% of gasoline into Puerto Rico, although often for consignment to other companies. In January 2022, they each brought in one cargo except for two from Gunvor. Trafigura led February imports with two cargoes, while Vitol and Total shipped one each.
The Netherlands was the main origin point for the imports, with 1.41 million barrels in January, roughly six of the 10 cargoes. Finland and Spain exported one each to Puerto Rico, as did Lithuania and Estonia. The Netherlands was also the main draw in all of 2021, but its 8.13 million barrels in exports to Puerto Rico lagged the combined 8.89 million from the Baltic nations. From 2016 to present, Lithuania topped Puerto Rico’s gasoline sourcing list with 38.14 million barrels in the time period, followed by Estonia with 35.04 million, the Netherlands with 30.27 million, Belgium with 20.63 million and Italy with 16.5 million barrels.