A BP spokesman, Scott Dean, said the firm diverted a fuel cargo bound for Montreal, Canada, to New York Harbor "at the request of the City of New York." City officials asked for extra fuel shipments as quickly as possible, and BP complied to boost supplies there and not to boost its bottom line, Dean said.
So far, two oil companies have informed the U.S. government they intend to use Jones Act waivers to ship fuel from the Gulf Coast to the East Coast on foreign-flagged vessels, a government source said on Monday.
Others may also be involved. Companies, which could include U.S. oil majors, are not required to tell the government they are engaged in the Jones Act arbitrage until after they load fuel into ships on the U.S. Gulf Coast.
Another shipping expert reported a huge jump in interest for tankers.
"The sudden announcement of Jones Act waivers on Friday was immediately followed by a flurry of inquiries to transport product cargoes from the U.S. Gulf to the Northeast," said George Los of shipbroker Charles R. Weber in Greenwich, Connecticut.
European firms have not been able to take direct advantage of the waiver, partly because of the time required to ship gasoline across the Atlantic.
But the waiver, by curtailing the flow of U.S. Gulf Coast gasoline to other destinations, could still result in fresh opportunities for European traders.
"I don't think there is too much buying in west Africa, but with the Jones Act waiver, that should change a bit," a European gasoline trader said.
"(The price of) U.S. Gulf Coast gasoline was very weak ... those barrels were arbing everywhere. Even west Africa."
He said the shift in Gulf Coast volumes was potentially creating an opportunity to export to west Africa instead.
A number of traders cautioned that gasoline prices in west Africa were not high enough to make it profitable for many firms. At least one said, however, that the region was still a better option than the United States.
"I am working other stuff. China, west Africa," another gasoline trader said, explaining why he did not plan to ship a single barrel of gasoline to the United States in the aftermath of the storm.
A third trader cited Brazil as a potential market as a result of the diversion of U.S. Gulf Coast cargoes.
"Everything is so slow though. I am not holding my breath," he said this week.