MOSCOW (MRC) -- Prices of heavy sour crude oil grades have been rising in the US Gulf Coast, traders said, as the market braces for a disruption of supplies from Mexico in the wake of a fire that has cut state-run Pemex's oil output by about 25% since Sunday, reported Reuters.
At least five workers were killed and six injured in the blaze, which broke out on an offshore platform in the southern Gulf of Mexico operated by Petroleos Mexicanos, halting production of more than 400,000 barrels per day (bpd), the company said.
It could take weeks for output and exports to return to normal, people familiar with the matter said, even as work is underway to restore power to the facility by Wednesday, and later connect 125 idled wells at the Ku-Maloob-Zaap (KMZ) cluster, Mexico's largest with a 750,000-bpd average output.
Pemex did not reply to a request for comment.
On Monday, Chief Executive Octavio Romero Oropeza said Mexico's monthly production and exports could fall, but the overall impact of the accident has not yet been estimated.
Prices of sour crudes at the US Gulf Coast, the largest recipient of Mexican oil, have begun rising as refiners begin to seek replacement barrels, traders said.
Chevron Corp, Phillips 66 and Valero Energy are scheduled to receive Mexican crude cargoes in coming days, according to people familiar with the trade. Valero aims to load a cargo on Tuesday, sourcing the barrels from onshore Pemex storage tanks at the Pajaritos terminal, they said. Pemex's Deer Park, Texas, refinery has not been affected, a spokesperson said.
Chevron, Phillips 66 and Valero did not respond to requests for comment.
Refining and trading firms are preparing for cargo delivery delays and the possibility of force majeure by Pemex, traders said.
We remind that, as MRC informed previously, an intense blaze at Mexican national oil company Pemex's largest refinery was quickly put out, but it remained unclear what sparked the fire. Local and social media had published images of bright orange flames burning near the facility's distillation towers from early on Saturday, 7 August, 2021. The Salina Cruz refinery, on the coast of southern Oaxaca state, can process up to 330,000 barrels of crude oil per day and is a key Pemex trading and logistical hub along Mexico's Pacific coast.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).