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Dramatic changes in the Atlantic MR marketDramatic changes in the Atlantic MR market

The dramatic changes in the transatlantic product market that sparked a flurry of orders for MR tankers has not so far in 2014 underpinned the good market we saw last year, when Atlantic MRs had average earnings of $15,000 -  $20,000 a day according to Clarkson Research.

Ian Middleton, Former Tanker Correspondent

June 6, 2014

1 Min Read
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Currently they are earning more like $4,000 to $8,000 with year-to-date averages in the $8,000 to $14,000 range.

The driver behind that change in the transatlantic product trade has been a combination of the near-demise of the European refining industry, once the dominant region in this sector of the market, and the resurgence of the US refining industry on the back of US shale oil production and therefore cheap feedstock for US refineries.

US clean exports have gone from 470m barrels per day (bpd) in 2007 to 1.89m bpd in 2013. Substantial quantities of products are now shipped round the globe, as London broker EA Gibson notes in a recent market report: distillates to Europe, gasoline to West Africa, and a whole array of products to Mexico, Central and South America.

Exports of gasoline to Mexico are increasingly sourced from the US Gulf and provide a considerable transportation and more importantly, cost advantage over imports from Europe, the report notes. The impact for Europe remains bleak and more enforced refinery closures are forecast, says Gibson.

Meanwhile the US is the biggest Emissions Control Area and will, from January, need to source significant volumes of low sulphur fuel to meet the new regulations, as will Europe. “The question remains whether the refining industry both in the US and Europe will be able to cope with the increase in demand and agree on an ‘acceptable specification’ for marine distillate fuel. If not this will naturally lead to sourcing the product from outside the ECA regions with some support to the product carrier market in terms of demand,” it concludes.

About the Author

Ian Middleton

Former Tanker Correspondent

Ian Middleton is former editor of Tanker Trends, and before that of both Seatrade magazine and Seatrade Week. After having begun his career with a leading UK newspaper chain, Ian joined Seatrade in the late 1970s, allowing him a ringside view of the up's and down's of the shipping business from the 1980s slump onwards.

With his specialist knowledge of the tanker market, Ian is one of Seatrade's most experienced writers and a practised conference speaker and moderator.

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