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Valero Receives Waiver To Ship Oil And Fuels To U.S. East Coast

The federal government has granted Valero Energy a waiver from the Jones Act—legislation restricting the number of vessels that can carry oil and fuels along the U.S. coastline.

Reuters reported the news citing unnamed sources familiar with the matter, who added that Marathon Petroleum and Citgo had also asked for waivers from the legislation in order to start shipments to fuel-starved East Coast towns and cities.

The shortage of fuel resulted from panic buying along the East Coast after the shutdown of the Colonial Pipeline network. The shutdown itself was the result of a cyberattack carried out by a ransomware group.

Colonial Pipeline resumed operations late on Wednesday, the operator of America's main fuel pipeline said, but warned that a full return to normal deliveries would take a few more days. Bloomberg reported, citing anonymous sources, that Colonial Pipeline Co. had paid almost $5 million to the cybercriminal group in untraceable cryptocurrency.

"Colonial Pipeline reports this morning that the restart of the pipeline went well overnight. This should mean things will return to normal by the end of the weekend," U.S. Secretary of Energy Jennifer Granholm tweeted early on Thursday.

Yet until the normal flow of fuels is restored, supply is likely to remain tight, which is reason enough for Jones Act waivers to be granted to more refiners. The Act states that only U.S.-flagged tankers manned by U.S. crews have the right to move goods between U.S. ports.

Earlier this week, thousands made a run on gas stations in parts of the East Coast, despite calls against panic buying. This led to some thousand stations warning they were running out of gasoline and diesel. According to Energy Secretary Granholm, rural areas in the Southeast are likely to start receiving fuels at a normal rate by this weekend.

By Irina Slav for Oilprice.com


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  • George Doolittle on May 14 2021 said:
    US East Coast Cities are hardly in the least "fuel starved." Massive inland Cities such as Orlando, Florida or Atlanta, Georgia or Charlotte, North Carolina or...amazingly...even the USA Capital Washington DC and massive surrounding area are absolutely and straight up...out of gasoline.

    But places along the US Coastline such as New York City, Philadelphia, Richmond, Savannah, Greater Miami, Tampa-St. Pete etc are not "fuel starved" in the least.

    Oddly enough the USA still has a massive glut of energy product so whilst I understand exactly the nature of the current problem I'll leave that to all you "smarty folks" here at oil price.com as to why truly vast quantities of oil and its distillate fuels cannot be had at *ANY* price at the moment.

    But, no...NASA will be launching more rockets imminently.

    "The Virginia Spaceport" not so much I agree with that yes, absolutely.

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