After more than doubling since the start of the year, the Baltic Exchange Clean Tanker Index has climbed to its highest level in over ten years on a quarterly basis, according to a new report from Singapore’s Eastport Research & Strategy, using April and May daily figures to date for Q2 2022.
“Dislocations in energy product flows following the Russian invasion of Ukraine has triggered a rebound in MR spot earnings,” Eastport reported.
Over 80% of vessels from MR chemical tanker operators are deployed in the non- chemical trade, such as vegetable oils and CPP, according to Eastport calculations.
“A tightening market for clean MRs may put upward pressure on long-haul chemical tanker rates as well,” Eastport predicted.
Since Russia’s war in Ukraine began over three months ago, the US has banned imports of all fossil fuels from Russia. What’s more, US crude oil has been shipped to Europe in volumes and US refineries have made a preference of exporting distillates to the Continent, acting on the transatlantic arbitrage. But that has only created ripple effects into the wider US refining complex, as higher production of distillates has come at the expense of producing gasoline, contrary to ordinary refinery behavior. This is all the more important now that the Memorial Day weekend ushers in the US driving season.
“What that means to the tanker market is that product carriers are hurrying to Europe to load gasoline for the US market, driving up freight rates on the MR route TC2,” a new report from Lorentzen & Co stated today.