US clean tanker market drops 70pc in 3 weeks

The US clean tanker market rates have seen an historic drop of about 70pc in only three weeks as oil products exports sink to their lowest levels since Hurricane Harvey shut in one-fifth of US refining capacity in 2017.

The US Gulf coast-Pozos, Colombia, rate has plummeted 68pc from its record high on 22 April to $415,000 lump sum yesterday. The US Gulf coast-Chile rate has fallen by 62pc to $1.25mn in the same period, while the US Gulf coast-east coast Mexico rate has tumbled by 76pc to $215,000.

Sluggish global oil demand stemming from Covid-19 containment measures and lower US refinery utilization rates are crimping US exports. The muted cargo demand is causing medium range (MR) tanker supply to accumulate in the area, causing the nosedive in freight rates.

Data from the US Energy Information Administration show US oil product exports in the week ending 8 May dropped to 3.9mn b/d, 24pc below the one-year average, and the lowest weekly level since 1-8 September, 2017, when Hurricane Harvey stalled Gulf coast shipping and refinery operations.

Clean tanker markets in Europe, the Middle East, and Asia are experiencing similar declines amid lower export volumes.

By Nicholas Watt