Expanded Panama Canal Changes Tanker, Rail Traffic Flows in U.S.
10.17.2016 - NEWS

October 17, 2016 [OPIS] - The Panama Canal expansion will shift cargoes from the U.S. West Coast to the U.S. East and Gulf coasts, and will in turn allow rail shipments inland to move farther west from the East Coast and reduce U.S. West Coast rail shipments with little net change in inland diesel demand, Kevin Lindemer, managing director of downstream consulting at IHS Markit, said this week.


Lindemer spoke on projected imports and exports of gasoline and diesel as well as the Panama Canal expansion at the OPIS Supply and Transportation Summit held in Scottsdale, Ariz., this week. The expanded Panama Canal is encouraging larger container ships to move the rail “null point” farther west in the U.S., and it also is allowing larger vessels to move from the Pacific to U.S. Gulf and East Coast ports, he said.

Bunker demand may increase on the East Coast and in the Gulf Coast, but any net impact is likely to be relatively small, Lindemer said.

U.S. crude oil and refined products exports could increase in terms of larger vessels moving west, but the volume impact will also be small, he said.

Markets on the west coast of South America will continue to be the largest market through the Canal to the west, Lindemer said. Larger west-bound oil tankers from the U.S. Gulf Coast will continue be uncompetitive in Asia, he added.

Longer-term market fundamentals indicate continued weak U.S. demand, which will continue to drive product exports higher, Lindemer said. U.S. refiners and liquids processors are increasingly exposed to the global market, he added.

U.S. demand for oil products, excluding LPG, is expected to start to fall again about 2018, and Latin American demand will rise with lagging refinery investments, Lindemer said. This combination of push and pull factors will provide long-term export markets for U.S. refiners for both gasoline and distillates, he said. Besides South America, U.S. products are exported to Europe, Africa and other destinations.

ORLEN Discovers a New Gas Field in the Province of Poznan
02.18.2025 - NEWS
February 18, 2025 [ORLEN]- Nearly a quarter of a billion cubic meters of gas – this is the size... Read More
Commonwealth LNG Eyes Q3 for FID as US Government Grants Non-FTA Authorisation for Exports
02.18.2025 - NEWS
February 18, 2025 [Gas Strategies]- Commonwealth LNG’s developers said they aim to reach fi... Read More
Australia's Woodside in Talks with at Least Three Partners for Louisiana LNG, Sources Say
02.18.2025 - NEWS
February 18, 2025 [Reuters]- Woodside Energy has held talks with several potential buyers of sta... Read More
KKR to Buy Additional 5% Stake in Eni Biofuel Business
02.18.2025 - NEWS
February 18, 2025 [Reuters]- U.S. fund KKR has signed an agreement with Italy’s Eni to bu... Read More