U.S.-Bound Gasoil, Diesel from Europe and Russia Now Over 5 Million Bbl

Eleven tankers are now seen shipping 510,00 metric tons (about 3.8 million barrels) of ultra-low-sulfur diesel or gasoil to the U.S. northeast from Europe or the Baltic, in a rare reverse arbitrage trade.

Already four ships with 184,000 tons have called at New York or Boston in the past week with gasoil or diesel cargoes, as plunging temperatures spike heating oil prices.

The trans-Atlantic trade flow is unusual, as diesel cargoes are normally shipped from the U.S. to Europe, which has a deficit of the middle distillate.

Oil trader Vitol appears to be taking the most advantage. Of the 15 ships identified as being chartered to load gasoil or diesel for the U.S. -- or with options to do so -- at least six are controlled by Vitol.

BP has three tankers on the water.

Cold weather along with the upcoming maintenance season and strikes at 12 refineries are pushing prices higher on the U.S. Atlantic coast, making it profitable to ship ULSD to the U.S. from Russia.

Diesel from the federation doesn't meet U.S. specifications and needs to be blended before arrival, trade sources told OPIS.

Ultra-low-sulfur heating oil in New York spiked at 213 cents per gallon on Feb. 26, the highest in 11 months, according to OPIS data.

The OPIS Tanker Tracker compiles information from traders and brokers, and FleetMon ship tracking to provide a real-time insight into Europe-bound refined products on tankers. Pinpoint detailed shipping information, such as vessel, product and volume being transported, and buying or selling party and gain critical intelligence on the movement of product from port to port. Learn more and take advantage of a 21-day, no-obligation free trial.

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