The hurricane has had a significant impact on oil markets with nearly a quarter of US refining capacity being closed. This has resulted on Asia’s product tanker markets and their refined products.
An estimated 865 kt of CPP from Asia has been booked to move to the US and Latin America since August 25. Before the destruction caused, around 375 kt was fixed for August whilst July recorded volumes of 675 kt. Cargoes arriving to the US from Asia normally move on MRs, though LR1s have also been chartered as well.
The rates for MR in North Asia have been increasing with the rates for a South Korea/USWC voyage basis 40 kt up by USD 150,000 to USD 1.15 million. The rates for a South Korea/Singapore run basis 40 kt grew by USD 20,000 from last week to USD 350,000.
“It is worth noting that quite a number of ships have failed subjects and are currently continuing to do so. Some ships were released as traders rushed to fix before they had the cargoes, while some traders were unable to find a buyer as key USGC refineries resumed operations, alleviating concerns about supply shortfalls,” OFE said.
USGC shipment delays have left LatAm buyers with no choice but to turn to Asia for gasoline imports. PMI, one of the largest buyers of USGC gasoline, has provisionally found fixed solutions to at least two MRs to carry gasoline from South Korea and Singapore to West Coast Mexico.