Mexico Fuel Oil Exports at Record High
06.29.2023 By News - NEWS

June 29, 2023 [Argus]- Mexican residual fuel oil exports in January-May rose to a record for the five-month period on strong demand from the US, the Netherlands and Singapore, but Asian demand is poised to ease.


Mexico’s state-owned Pemex exports of high-sulphur fuel oil (HSFO) reached 218,748 b/d during the first five months of the year, up by 24pc compared with the same period in 2022 and the highest for January-May since the company started reporting fuel oil exports in 1990.

The increase comes on the heels of last year’s record Mexican residual fuel oil exports of 173,488 b/d, 10pc higher than 2021 (see chart).

In the first five months of this year, Mexican residual fuel oil exports to the Netherlands more than tripled to about 9,300 b/d, up from about 2,130 b/d during the same period last year, tanker tracking data from Vortexa showed. The HSFO supply pool available to northwest European importers has tightened since EU sanctions on Russian refined products came into effect in February. In addition to Mexico, the Netherlands has also ramped up fuel oil imports from Saudi Arabia, the UAE and the US Gulf coast.

Mexican fuel oil exports to the US jumped in by 49pc to about 161,100 b/d in 2022 from about 108,200 b/d in 2021. US demand for Mexican HSFO cargoes spiked after the US banned imports of Russian crude and refined products in April 2022. In January-May this year, Mexican fuel oil exports to the US rose further to about 165,500 b/d, up by just 1pc from the same period in 2022.

Mexican fuel oil exports to Singapore rose to about 14,500 b/d in the first five months of the year, up by 167pc from a year earlier. Singapore’s HSFO appetite for bunkering has been strong, with Singapore sales rising on the year by 20pc to about 265,000 b/d in the first five months of this year, according to Singapore maritime and port authority data.

Singapore’s appetite for Mexican HSFO reflected redistribution of Russian HSFO cargoes. Historically northwest Russian residual fuel oil exports moved to Rotterdam on Aframax tankers. From there, the Russian fuel oil was loaded on VLCCs and was re-exported to Asia-Pacific, mostly to Singapore and Malaysia. When the flow of Russian fuel oil through northwest Europe halted in February, Russian producers re-directed their cargoes directly to Singapore and Malaysia.

Russian fuel oil exports to the Netherlands dropped by about 119,900 b/d to about 8,110 b/d in the first five months of the year, while Russian fuel oil exports to Singapore and Malaysia rose by about 79,500 b/d to about 143,100 b/d during the same period, Vortexa data showed.

Asia HSFO demand poised to ease

Demand for HSFO in Asia is expected to ease with China’s government issuing fresh crude import quotas to domestic refineries on 14 June. Prior to that, Chinese refineries were reaching the limit of their crude import quotas and were seeking high-sulphur straight-run feedstocks as an alternative.

Mexico’s Pemex produced 298,842 b/d of residual fuel oil in the first five months of 2023, up by 18pc from the same period last year. The 330,000 b/d Salina Cruz refinery on Mexico’s west coast accounted for 27pc, or 81,313 b/d, of the country’s fuel oil output in January-May, and the 315,000 b/d Tula refinery in south central Mexico accounted for 25pc or 74,618 b/d. In 2022, Mexico’s residual fuel oil production reached 258,278 b/d, the highest since 2014.

Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Tangier Island Awarded $2.3 Million Grant for Fuel Storage
06.20.2024 - NEWS
June 20, 2024 [National Fisherman]- Tangier Island, Va., sits in the middle of Chesapeake Bay wit... Read More
Sweco Supports VoltH2 in Design and Development of New Green Hydrogen Plant in The Netherlands
06.20.2024 - NEWS
June 20, 2024 [Public Now]- The European energy company VoltH2 has selected Sweco as its partner ... Read More
ONEOK Completes Acquisition of Gulf Coast NGL System
06.20.2024 - NEWS
June 20, 2024 [ONEOK]- ONEOK, Inc. announced that it has completed its acquisition of a system of... Read More
Phillips 66 Refining Margins Tighten on TMX Expansion Start-Up
06.20.2024 - NEWS
June 20, 2024 [Market Screener]- U.S. refiner Phillips 66 said on Tuesday its margins have tighte... Read More