Global Partners Expects Tight Supply Heading Into Driving Season

Global Partners, a large U.S. fuel distributor, retailer and terminal operator, expects tight fuel inventories during the summer driving season because of the Middle East conflict, executives said Friday during a conference call with analysts.

Chief Operating Officer Mark Romaine said the U.S. has been drawing inventories “pretty aggressively” over the last six to eight weeks.

“We’re at a pretty low level heading into a key driving season,” he said during a call discussing first-quarter financial results. “Even if the conflict is resolved tomorrow, there’s been a lot of damage done to worldwide production and inventories are at a pretty low level across the board.”

Romaine said global supply will take time to recover and there will be “some lasting impact.”

Chief Executive Officer Eric Slifka said that many nations could stockpile crude or refined products.

“If countries decide they want to build secure inventory that they can use in a market like this, that’s going to put pressure on supply because it’s going to show up as increased demand,” he said.

Slifka told analysts that U.S. consumers continue to be “pretty healthy” overall, despite higher gasoline prices. The company tracks fuel transactions and average gallons per purchase, and Global has seen some decline in demand through March and April.

“I do think that higher gasoline prices will impact the share of wallet going forward,” Slifka said. “We continue to lean in on promotions and loyalty [programs] to drive customers into our stores. But depending on how long this goes on, it could have a further impact on potential demand at the pump.”

At the end of March, Global had a network of 1,513 stores, excluding the 68 sites it operates under the Spring Partners retail joint venture with ExxonMobil.

Global reported net Q1 income of $70.1 million, up from $18.7 million a year ago. Ebitda was $142.1 million in Q1, up from $91.9 million last year.

Reporting by Donna Harris, dharris@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com