So last month, amidst little fanfare, Sun oil company closed their two northeast oil refineries. This is bad. Both refineries haven't been modernized in the past 20 years. Sun's current CEO, who is more interested in selling candy bars and slurpees at the retail level than making oil, has orchestrated sun's abandonment of these billion-dollar refineries. I say abandonment because Sun never reinvested in them, so while they're technically for sale, no one is going to buy them, as they will not return the profit of a well-maintained facility. Sun Oil is the funder of the Pew Trusts, politically-motivated clearinghouses for radical causes in 'social justice' whatever the fuck that means (socialism), and environmentalism. Sun is a very lucrative backer of green, Inc. But in the meanwhile, we now have limited capability of refining finished products (read: fuels) in the northeast.
To put the corn in this punchbowl turd, Hess oil is closing their St. Croix refinery as well, co-owned with PVDSA, the Venezuelan governmental oil company (the folks that do business as CITGO in the US. This represents something interesting here. Being located safely out of arms' reach of Hugo Chavez' nasty habit of stealing other people's oil-finding and -making equipment (this being cheaper than maintaining their own, thus saving PVDSA from maintenance costs) in Venezuela, taking a page out of PEMEX (Mexico's national oil company, who is doing miracles keeping their refineries sort of open using bailing wire, bubble gum and slave labor to save on costs)'s book.
Without fear of PVDSA pulling a smash and grab, such as the BS pulled by Venezuela last year on Chevron and Tidewater (both being American companies) and BP (Being British, and therefore somewhat used to appeasement at any cost, this being their way of survival in places like the Middle East where they lack access to shock troops like TOTAL (France) has with the Foreign Legion to keep the mongs in line. At any rate, Hess St. Criox is heading for mothballs.
St Croix is a great stopping-over point for foreign ships to transfer oil from VLCC's (Very Large Crude Carriers (which are far too big to get anywhere near the US except for a few mooring stations in the Gulf of Mexico) to Suexmax and AFRAmax (smaller, but still goddamned big tankers for delivery to North America. Since HOVENSA (the St. Criox refinery) and even the shuttered Sun refineries in Philly and Marcus Hook NJ will be used as tank farms, there will still be companies lining up to store their oil and release it at strategic sales times at the former refineries. There won't be any return trips carrying refined or semi-refined oil back to points East for the VLCC's, however, as was the custom before, which means more big-ass ships deadheading from Disport to Loadport in the far east. This is bad for shipping, of course, as oil transshipment is already fairly unprofitable these days.
One final thought: this is very reasonable proof that the people making the money off of oil aren't the people making the Oil. Exxon Mobil might be making massive bank, but they're doing so on margins that are an order of magnitude less than the speculators and money machines who are driving prices. I've said to friends (carefully, and looking carefully at anyone who might be in earshot) on several occasions that the oil companies aren't the robber barons here; you want to see who is making $10 for every $1 the oil majors are making, look at your retirement fund manager to start with.
Humpday Cup o' Joe....
21 minutes ago