Harvey Hits US Fuel Supplies to Latin America

NEW YORK, Aug 27 (Reuters) - Tropical Storm Harvey could cause fuel shortages in Latin America after it shut in around 1 million barrels per day of U.S. gasoline and diesel exports typically destined for countries such as Mexico.

Harvey barreled into Texas on Friday as the strongest hurricane to hit the state at the heart of the U.S. oil and gas industry in over 50 years.

The United States is the world's largest net fuel exporter, and most of those shipments sail from ports in Texas and Louisiana. Harvey shut down the ports of Corpus Christi and Houston in Texas, and both are major fuel export ports.

"Any hiccup in U.S. refined product exports is highly disruptive to the supply chain given the dependency of nations like Mexico and other Latin American countries on the U.S.," said Michael Tran, director of global energy strategy at RBC Capital Markets.

"The reliance on U.S. products is particularly key this year given that many refineries in Central and South America are running at abysmal levels."

Latin American countries such as Mexico and Venezuela have become increasingly reliant on imports because they have failed to invest in expanding refineries to keep up with rising demand.

The U.S. exported 2.49 million barrels per day (bpd) of refined products and 100,000 bpd of crude to Latin America in the first quarter, according to the Energy Information Administration. Over 950,000 bpd ended up in Mexico - the biggest overseas market for American-made fuel.

Mexico depends on U.S. fuel to meet nearly three quarters of its domestic gasoline demand.

A spokesperson for Mexican national oil company Pemex said its gasoline and diesel inventories were sufficient to make up any shortfall in supply Harvey may trigger.

"New shipments via safe routes are on the way (to Mexico) and left on time from the southern Untied States before the hurricane arrived," he said.

He did not detail the volumes Mexico holds in stockpiles or how many days of demand could be covered with emergency supplies.

Aside from waterborne shipments, the United States also sends supplies to Mexico via rail and road, but those flows have been hit too.

Union Pacific Corp, the no. 1 U.S. railroad, said it was moving rail cars in yards prone to flooding to high elevations and would curtail trains operating through areas likely to be hit by excessive winds and rain that will impact operations.

Serious disruption to global oil supplies could trigger a coordinated international release from the Paris-based International Energy Agency (IEA). The IEA has previously released emergency supplies to cushion the impact of natural disasters and war on international energy supplies.