US seizes 90 biodiesel shipments bound for Cuba worth nearly $3 million
Federal agents intercepted 90 consignments of US biodiesel headed for Cuba, worth close to $3 million, in a widening probe into fuel exports that allegedly broke US sanctions. The buyer was Enetec S.A., a Havana wholesaler the Treasury's Office of Foreign Assets Control sanctioned in July. Anyone moving product through a terminal should pay attention this week.
The Enetec seizure
CBS News reported Wednesday that Homeland Security Investigations and Customs and Border Protection pulled the loads after agencies got intelligence that US fuel was still reaching Enetec despite the July designation. The company sells fuel inside Cuba, and the exporters supplying it kept shipping.
For a marketer, the lesson is about reach. OFAC enforcement runs down the supply chain and does not stop at the named party. A jobber who sells into an export channel can end up holding product tied to a sanctioned buyer two steps removed. Biodiesel and renewable diesel have drawn fresh federal attention this year because of the credits attached to them, and now the export side is getting the same treatment. Find out who ultimately takes the gallons. The name on the first invoice is not enough.
Crude up almost 4%
Oil climbed nearly 4% on Middle East tensions and worries about US supply, per Anadolu. A move that size on the front month feeds straight into rack prices within a day or two, so unbranded buyers shopping the spot market this week may see their best posted number move against them fast.
I won't call the direction. Crude could ease if the tension cools and nothing hits actual barrels, and it could hold if the supply worry sticks. Watch your rack the morning after a move. The futures screen the night before tells you less.
Pre-buying diesel
Several school districts dodged a diesel price jump by placing wholesale orders before the latest conflict, TribLIVE reported. It is an old approach, and it worked again. Districts and fleets that locked wholesale volume ahead of the run-up are paying yesterday's number while spot buyers pay the new one.
For a jobber, the takeaway is on the sell side. Contract customers who pre-bought are covered and quiet. The ones who ride the rack are the accounts calling you this week, and they are the margin opportunity when supply gets jumpy.
What to watch
Whether the Enetec probe names more exporters, and whether OFAC widens it past the single Havana buyer. Watch rack spreads over the next few sessions to see how much of the 4% crude move passes through to branded and unbranded posts. And watch how many contract renewals come in early as fleets try to lock before the next scare.