Phillips 66 First To Take Advantage of Jones Act Waiver for US Crude.

Phillips 66 has shipped crude oil from Texas to the U.S. East Coast on a foreign-flagged tanker, the first such cargo since Washington waived the Jones Act last month, Kpler ship-tracking data shows.

The Bakken crude was loaded in early April at a Phillips 66 terminal in Beaumont, Texas, onto the Malta-flagged Htm Warrior. The vessel is destined to carry the cargo to the Trainer oil refinery in Pennsylvania, owned by Delta Air Lines subsidiary Monroe Energy.

The long-standing Jones Act requires that cargo moving between U.S. ports travel on vessels that are U.S.-built, U.S.-flagged, and U.S.-manned, reducing the number of ships available to move crude oil and refined products between domestic ports. It has routinely found itself the subject of intense scrutiny, especially in times of oil scarcity, but the Act has persevered.

The 60-day waiver, signed March 18, temporarily allows foreign-flagged vessels to move oil, gasoline, diesel, and other fuels along U.S. coastal routes in an effort to take at least some pressure off the oil markets amid the current oil crisis.

Kpler data shows no other shipments of U.S. crude have moved between the Gulf Coast and the Atlantic Coast on foreign-flagged vessels since the waiver took effect, according to Bloomberg, although data does show that several cargoes of Middle Eastern crude have moved between U.S. ports on foreign ships over the same period.

Phillips 66 has extensive operations on the Gulf Coast, including storage and marine terminals in Beaumont, where crude oil from inland basins is aggregated before being shipped or refined. The company has access to Bakken supply moving south via pipeline networks into Texas.

The Trainer refinery in Pennsylvania processes light crude into jet fuel, gasoline, and distillates, supplying the Northeast market. The refinery has a nameplate capacity of about 185,000.

The Northeast has limited refining capacity and depends on supply from the Gulf Coast and imports. Jones Act shipping constraints have historically limited the movements of domestic crude along the coast.

Source: Oilprice