Pemex declares force majeure on U.S. gasoline imports
Fuel glut builds offshore with vessels waiting to discharge
Fuel consumption has fallen by as much 50% during pandemic
By Lucia Kassai and Jeffrey Bair/Bloomberg
Petroleumworld 04 23 2020
Mexico, the largest recipient of U.S. gasoline exports, is seeking to cancel imports of the fuel from at least one U.S. company amid the rippling effects of the coronavirus on demand.
Petroleos Mexicanos's trading unit, PMI, declared force majeure on imports of gasoline as an armada of vessels unable to discharge the fuel idles on the Atlantic and Pacific coasts, according to a person with knowledge of the situation. The legal term “force majeure” typically describes an unexpected, external event that makes it impossible for a party to fulfill its obligations under a contract.
Fuel consumption at gas stations fell by as much as 50% as Mexicans follow the stay-at-home order from President Andres Manuel Lopez Obrador. The logjam is about 60 vessels waiting, said Erick Tapia, an independent Mexico oil consultant and former PMI employee. Each vessel carries on average 300,000 barrels, bringing the total on the water to about 18 million barrels.
“This will be a very complicated situation for them to unwind themselves from,” he said.
Pemex didn't immediately return email seeking comment.
— With assistance by Amy Stillman