May 14 (Bloomberg) -- U.S. East Coast gasoline imports surged to the highest level in 11 months last week amid speculation that increased blending at Caribbean sites including Buckeye Partners LP’s Bahamas terminal boosted shipments.
The region received 861,000 barrels a day of the motor fuel in the week ended May 9, up 61 percent from the previous period and the highest level since June 21, according to the U.S. Energy Information Administration. Imports are up from 264,000 barrels in the seven days ended Feb. 21.
A March 6 decision by U.S. Customs and Border Protection allows gasoline components to be shipped from the Gulf Coast to the Bahamas, blended into finished gasoline and sent to the East Coast on foreign-flagged tankers. A law known as the Jones Act requires that U.S.-made fuel be shipped between domestic ports on U.S.-flagged vessels.
“Imports were surprisingly high for this exact reason,” said Tom Finlon, director of Energy Analytics Group Ltd. in Jupiter, Florida. “There are a very limited number of U.S.- flagged ships so when you’re able to load up a foreign ship with mostly U.S. product and send it to the U.S., you’re facilitating a larger flow of imports.”
Oil companies and traders booked at least 429,000 tons per week of refined products, including gasoline, for shipment to the U.S. East Coast from the Caribbean so far this month, 46 percent higher than last May, according to data compiled by Bloomberg.
Buckeye’s Bahamas Oil Refining Co. International Ltd. terminal in the Caribbean, known as Borco, has 21.6 million barrels of crude and refined products storage capacity. It’s located off the southern tip of the Grand Bahama Island, according to the company’s website. The voyage to New York from the Bahamas takes about 3 days, AXSmarine data show.
Past decisions by the government allowed companies including Irving Oil and Global Partners LP to blend gasoline in Canada for shipment to the U.S.
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