Atlantic MR market tops clean product tanker sectors

In 2005 the US was exporting less than 400,000 barrels per day (bpd) of clean products and was running a large trade deficit on oil and product imports. That deficit has been shrinking as, thanks to the shale oil revolution, product exports have soared and crude imports diminished. Last year the US exported 1.84m bpd of clean products in January to November.

Fracked oil has provided cheap feedstocks for US refineries where net input currently stands at 15.3m bpd - 875,000 bpd more than at the same time last year according to London broker EA Gibson.

Hence MR earnings in the Atlantic markets maintained healthy averages of between $15,000 a day and $20,000 a day in 2013 compared to the sub-$15,000 a day that their larger cousins in the eastern market, the LR1s and LR2s, had to subsist on. And this is only part of the story as canny owners can considerably improve market average earnings through triangulation with one prominent Scandinavian product carrier operator claiming last year that his fleet was laden 80% of the time.

Gibson’s notes that the fronthaul MR transatlantic route has been repeatedly switching direction since mid-last year.

This year the good news has continued despite a few hiccups with MRs in the Atlantic earning similar sums to last year's averages as the severe winter continued to generate product demand in the northern hemisphere while demand remains high in the US's "new" products markets of West Africa, East Coast South America and the Caribbean.

Exports to the Far East are expected to follow says the London broker, and the widening of the Panama Canal could give added impetus to this possibility.

Add Seatrade Maritime News to your Google News feed.