LR3s – or coated suezmaxes – are nearing extinction. According to Alphatanker, there are currently just 26 afloat and no ships of this type on order. Moreover, only 12 of the existing units are currently trading clean with the rest trading as suezmaxes in the dirty tanker pool.
Alphatanker cited three main reasons for the decline of LR3s in its most recent weekly report. Most important is the lack of a backhaul cargo for an LR3 to carry from west to east. Secondly, existing LR3s do not generally have a large number of separate tanks compared with modern clean petroleum product carriers. Finally, LR3s have been hit hard by the increasing use of newbuild suezmaxes and VLCCs on their maiden voyage to transport clean products from East of Suez refiners to the Atlantic Basin. Since January 2020, 33 of these vessels have loaded in amongst others, India, China, Singapore, South Korea and Saudi Arabia taking the place of a potential 39 LR3 fixtures.
An LR3 costs $4m more to construct than a standard suezmax built in South Korea, according to Alphatanker, who warned LR3s are set to become a scarcer and scarcer sight on the ocean.