142 New MRs Are Coming
MR trade set a record in January. The delivery schedule will decide who keeps the margin.
MR clean trade reached a record 10.1 million b/d in January, helped by Russian refinery outages and re-routed product flows. The supply side is coming. Roughly 142 MR vessels deliver in 2026. The product tanker fleet is growing around 6.5% against cargo volume growth of 0.5-1.5%. LR2s face additional pressure from Aframax cannibalization as crude tonnage swings into clean trades.
The premium unwinds
The war-era freight premium pushed spot earnings to record levels while LR2s and Aframaxes could not transit the strait. That premium has largely unwound with the resumption of traffic. BIMCO's base case has product tanker rates faltering into year-end even as crude tanker rates hold.
Our read
Softening clean freight is a tailwind for Atlantic Basin arbitrage. It widens the window on USGC-to-Caribbean and transatlantic product flows. For charterers, the delivery wave argues for staying spot rather than locking term cover at today's rates. Freight is becoming the cheapest leg of the trade again.
This commentary is provided for general information only and does not constitute an offer, solicitation, or recommendation to buy or sell any commodity or financial instrument.