US oil import from Mexico soars to 7-month high as refiners replace Russia

US import of oil from Latin American countries soared in April to touch the highest level in seven months, data from US Customs revealed on Thursday as buyers scrambled to replace Russian supplies.

US refiners imported about 1.3 million barrels per day (bpd) of crude and fuel oil from Latin America in April, according to US Customs data.

In March, the US banned imports of Russian crude and refined products over its invasion of Ukraine, setting April 22 as deadline for purchases. Treasury Secretary Janet Yellen urged companies to adopt “friend-shoring” supply networks, or buying from trusted countries.

Mexico swiftly emerged as one of them – with its share of US fuel oil imports climbing to about 27 percent in March and April, from 19 percent a year earlier. Overall import of fuel oil from Latin America averaged some 200,000 bpd in March and April, 49 percent higher than in the previous 12 months, the data showed.

About 15 vessels discharged 159,000 bpd of Mexican fuel oil in Louisiana, California, Texas and Florida, supplying Exxon, Chevron Corp and Marathon Petroleum Corp among others.

According to energy strategist Clay Seigle, the most interesting storyline has been Mexico’s ability to capture market share from Russia. “The US market for Russian fuel oil has been permanently destroyed,” he told Reuters.

Russia supplied about 135,000 bpd, or 5.5 percent of total US crude imports last year, and 155,350 bpd, or 29 percent, of fuel oil imports, according to Refinitiv Eikon.

Russia to divert unsold oil to Asia
Russia said on Thursday it will send any oil rejected by European countries to Asia and other regions. Russian Deputy Prime Minister Alexander Novak said that Europe would have to find substitute supplies that would be more expensive.

The European Commission on Wednesday unveiled a $315 billion plan for Europe to end its reliance on Russian fossil fuels by 2027 and to use the pivot away from Moscow to quicken its transition to green energy.