Because of a US court ruling on Monday that ordered the largest pipeline from the North Dakota shale oil fields to be shut within a month, prices for gasoline and diesel in the US Midwest could rise in the coming months.
The closure of Energy Transfer’s 570,000 bpd Dakota Access oil pipeline (DAPL) will drive up the transport cost of crude to the refiners, or force them to pay for alternative supply from elsewhere. That will increase the cost of the fuel they produce.
Crude supply in the Midwest has already seen constraints this year from a court ruling that said Canadian pipeline operator Enbridge Inc had to halt operations for its Line 5. The line carries crude to refineries in states such as Michigan and Ohio. With five midcontinent refineries, an analyst at Tudor, Pickering & Holt said Marathon Petroleum is the independent refiner that is most exposed to the pipeline shutdown.
Marathon has other alternatives for supply because it sources crude from many different pipelines. Companies that have access to crude supplied by rail are likely to benefit, such as Par Pacific Holdings and PBF Energy.
