Asian long range (LR) tanker market has seen a surge in rates following the Hurricane Harvey amid heightened demand from Europe and Americas resulting from US refinery outages.
According to Ocean Freight Exchange (OFE), rates on TC1 and TC5 freight routes surged by w17.5 and w14 points week-on-week to w115 and w135 respectively.
“With many ships taken on long-haul voyages from Asia and the Middle East to Europe and Americas, the position list has tightened considerably,” OFE said.
As informed, at least 3 LR2s were taken for short-term charters ranging from 30 to 90 days to store gasoil this week, boosting firm market sentiment. Two LR2 and ten LR1 vessels are available for loading in the AG over the next week.
EIA data indicates that weekly US diesel exports hit a 6-year low of 739 kb/d for the week ending September 1, greatly reducing flows to Europe.
Around 1.84 mmt of middle distillates for September loading in Asia and the Middle East have been tentatively booked with an option for delivery into Europe so far, underpinning the strength in LR rates.
In comparison, around 3 mmt of middle distillates were shipped from Asia and the Middle East to Europe for August loading following the fire at Shell’s Pernis refinery, OFE further noted.
As of September 13, four refineries in the Gulf Coast region were shut down, while five refineries were in the process of restarting operations.
Some 54 oil vessels are left stranded off Texas ports due to Harvey’s impact, based on the latest figures from the US Department of Energy.
Eleven ports that were responsible for the crude average imports of 2,077,000 b/d from January through May 2017 were shut down after the hurricane.
Three weeks after the storm, the nation’s leading port for crude oil exports, Corpus Christi is in recovery mode.
The port is open with restrictions, allowing vessels up to 43’ draft to transit during daytime hours only.
Houston and Galveston ports have also switched to recovery mode with vessel restrictions in place, while Texas City and Brownsville ports are open without restrictions.