Imports of vacuum gas oil (VGO) by the US and Caribbean region from across the Atlantic are set to drop sharply in March from the strong levels of the past three months, Vortexa data indicates.

Imports sourced from the wider European region and Russia are expected to more than halve from the previous month to at least around 400,000-450,000t in March, preliminary estimates show, after a narrowing of the main arbitrage route.

Contrary to this trend however, some US ports are still expected to maintain a firm level of transatlantic intake in March, as planned maintenance work at some crude distillation units can be expected to reduce domestic feedstock supply.

For US Gulf coast refiners, increased processing of lighter crude grades—on account of higher US shale oil production—may also be crimping domestic production of VGO, prompting them to increasingly seek product from Russia and Europe. This comes against a background of lower Latin American VGO intake by the US and Caribbean region as compared with previous years.

US demand for transatlantic VGO for use as feedstock in gasoline-producing refinery units should find support with the nearing start of the driving season and the switch to summer-grade gasoline.

US gasoline stocks fell to 245mn bl in the week ending 9 March, down by 6mn bl from the previous week, according to latest US EIA data—the biggest draw in around half a year, on firm demand and the running down of winter-grade stocks.