Insight from Washington: US refiners remain pragmatic amid tariff disputes

Like many ways the Trump administration has reshaped US policy norms, the use of tariffs and tariff threats to address non-trade policy issues with other countries is here to stay, and companies like US Gulf Coast refiners are learning to adapt. That reality has set in for the energy sector not only because of the ongoing trade conflict with China, but also since President Donald Trump’s threat to impose a 5% tariff on all Mexican imports. Although the threat was called off at the 11th hour, it was a huge shock to the US refining sector, which depends on Mexico as one of its top sources for heavy crude imports and the most valuable customer for its refined product exports. Refiners turn $14 billion worth of annual Mexican crude imports into $30 billion worth of gasoline, diesel and other fuels exported back to Mexico. Additionally, Mexico’s heavy Maya grade has been key to refiners as other sources of heavy crude dwindle on the global market as a result of turmoil in Venezuela, US sanctions against Iran, and pipeline constraints out of Canada. “Not having access to Maya would definitely make things much more challenging” for US refiners, said Susan Grissom,… continue reading

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Source: CTRM Center

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