US Gulf clean tanker rates fall as Colonial restarts

Clean tanker rates in the US Gulf coast have fallen from one-year highs during the past two trading sessions as oil product export demand from the region has waned following last night's restart of the Colonial Pipeline system.

The US Gulf coast-Europe medium range (MR) tanker rate has dropped to WS120, and the US Gulf coast-east coast Mexico rate has dropped to $450,000 lump sum, according to a shipbroker. On 11 May Argus assessed the rates at WS140 and $625,000, respectively.

The restart of the key pipeline has erased expectations of sustained heavy demand for waterborne shipments within the Atlantic basin to the US east coast.

Various MR tankers that were provisionally booked earlier this week for voyages with loading in the Americas failed to be fully booked, including the Vinjerac, the Celsius Porto, the Aquadisiac, the Crimson Pearl and the Paccha. The widespread failure of tanker bookings is common when rates readjust downward after surging during a period of crisis.

The pipeline's restart has also ground US Gulf floating storage demand to a halt as the pipeline has returned as an outlet for Gulf coast refineries.

Four tankers, one of which subsequently failed, were booked during the week's first two trading sessions for floating storage in the US Gulf coast.

Prior to the decreases, MR tanker rates in the US Gulf coast had risen by more than half on 10-11 May, reaching the highest levels since May 2020, when clean tanker rates surged to record highs following April 2020's oil price crash and subsequent floating storage boom.

By Michael Connolly