Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – September 2017
US relaxes restrictions
to meet fuel needs following hurricane disruptions
The US administration relaxed shipping and product specification restrictions to meet fuel needs following
disruptions caused by hurricanes amid concerns about shortfalls in motor fuels.
On 8 September, US Department of Homeland Security (DHS) issued a waiver of the federal Jones Act,
which requires all vessels transporting goods between US ports to be US-built, US-owned, US-flagged and
serviced by US crews. The waiver – which covers a seven day period – seeks to facilitate the distribution of
refined petroleum products – namely, gasoline, diesel and jet fuel – from New York, Pennsylvania, Texas
and Louisiana to South Caroline, Georgia and Puerto Rico.
The head of the DHS called the move “a precautionary measure to ensure we have enough fuel to support
lifesaving efforts, respond to the storm, and restore critical services and critical infrastructure operations in
the wake of this potentially devastating storm.” The order was issued ahead of the expected landfall of
Hurricane Irma and in response to the disruption of product flows following Hurricane Harvey.
The last Jones Act waiver was issued in December 2012, for petroleum products to be delivered for relief
assistance in the aftermath of Hurricane Sandy.
Separately, the US Environment Protection Agency (EPA) issued waivers allowing the sale of reformulated
gasoline without additive to reduce pollution during the summer in all east coast states located in PADD 1,
all mid-western states located in PADD 2, and all Gulf Coast states located in PADD 3. The move allows
refiners and blenders to make an earlier shift to producing and selling more volatile but less expensive to
produce “winter-grade” of gasoline.
Colonial Pipeline filed an emergency petition seeking permission from Federal Energy Regulatory
Commission (FERC) to transport ‘transitionary’ gasoline – a grade between summer and winter
requirements – from Texas to the US Northeast. This follows a similar request by refinery Valero Energy
Corp, which said the waiver would allow Gulf Coast refiners to resume shipments without “undue and