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Red Sea Disruptions Spark Oil Tanker Shortfall

Red Sea Disruptions Spark Oil Tanker Shortfall

Disruptions in the Red Sea…

Houthi Red Sea Attacks Are Boon for Pirates as Ships Reroute

Houthi Red Sea Attacks Are Boon for Pirates as Ships Reroute

It’s unlikely that surging piracy…

Early 2024 Product Tanker Rates May Crush Even 2022 Records

Product tanker rates are showing signs of strength, and have the potential to crush even the records set in 2022—and the number of oil cargoes transiting through the Bab el-Mandeb Strait is falling.

The number of ships carrying crude or dirty petroleum products such as fuel oil has dropped 25% in the year to January 19, Vortexa data compiled by Bloomberg show, and the rising shipping rates are starting to eat into the profits of manufacturers, including Tesla, which announced a two-week production halt at its facility in Germany due to the supply chain shortages caused by delays in shipments.

According to Bloomberg, about 2,300 vessels are taking the long way around to steer clear of Houthi attacks in the Red Sea—a situation that could lead to inflationary surges.

And while the industry is lamenting delayed transit times for supplies, increased costs, and reduced bottom lines, clean petroleum product tanker rates are holding strong—exceptional even—with Long-range 2-type (LR2) eco-scrubber tanker rates for the Western triangulation yielding more than $90,000 per day. Eco-scrubber LR1s in Asia could be generating nearly $80,000 per day.

These rates are indicative of tanker rates that could blow the records set in the fourth quarter of 2022 out of the water, so to speak—and it could happen this week, Ed Finley-Richardson forecast Tuesday on X.


Analyst forecasts are being altered due to the upheaval in the Red Sea—an area that sees 12% of all global sea traffic traverse through it. The losers come reporting time, according to revised analyst estimates, are automakers, for one, which have been revised down by 5%, Bloomberg data showed.

On the other hand, shippers are expected to make out well, with earnings estimates for MSCI Europe’s transportation index rising by 7% over the last two weeks.

By Julianne Geiger for Oilprice.com

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