A US decision to allow more ethanol content in petrol this summer could have a knock-on effect for Atlantic MR tankers, broker BRS Group argues.
The country’s Environmental Protection Agency (EPA) has announced a temporary increase in sales of the E15 blend, which has an ethanol content of 15%.
The move has been made to reduce the potential of supply disruptions stemming from the Russia-Ukraine conflict and tensions in the Middle East, BRS said.
Normally the summer blend is E10, with 10% ethanol content, due to air pollution concerns.
But research appears to show little difference between the two in terms of environmental impact, BRS explained.
“If more ethanol is blended into the gasoline pool it could decrease the call on gasoline imports,” the brokerage said.
“In turn, this could have an impact on demand to ship product from Europe to the US Atlantic coast, the majority of which is hauled by MRs,” BRS added.
MR rates in the Atlantic basin were quoted at $26,300 per day on Wednesday, down 30% over the last month.
And in the Pacific, earnings were higher at $31,600, but down 25% since the same point in March.
Clarksons Securities assessed average eco MR earnings as $33,300 per day, with older vessels at $29,400.
Slow crude market
On the crude side, chartering activity has been slow so far this week, the investment bank said.
VLCCs, suezmaxes and aframaxes have all lost between 7% and 11% in earnings from last week.
Clarksons Securities pegged VLCCs at $45,900 per day.
However, brokers believe there is more upside potential than downside at the current levels.
Refinery maintenance in Asia, combined with a steep backwardation in the oil price, encourages inventory draws rather than importing marginal barrels, the investment bank explained.
