Product tanker earnings appear to have bottomed out after sharp declines in 2023 as the sector prepares for a “gradual recovery” following the European Union’s seaborne import ban of Russian refined oils.
Shipbroker Clarksons said MR tankers were up by 50% from a week earlier to $31,600 a day after falling to a 12-month low in the run-up to the embargo.
“While it is too early to determine the impact of the Russian embargo, product tanker earnings are increasing,” it said in its daily report.
“We don’t expect a sudden shift from the embargo, but rather a gradual recovery as Europe consumes the stockpiles built up over the last two months.”
The Baltic Exchange clean tanker index continued to make small gains from year-long lows earlier this month.
The declines at the start of the year followed bumper rates amid frantic activity at the end of 2022 as Europe built up diesel and other stocks before the ban kicked in.
The EU ban on seaborne Russian imports was accompanied by oil price caps set by the G7 and EU nations at $100 a barrel for diesel, kerosene and other premium products and one at $45 for oils that typically sold for less than crude.
Russian oil cargoes can only be carried, insured and financed by European interests if the sale prices fall below those levels.
“At the time of writing the Russian market is a bit unpredictable due to the new EU ban, but it seems that with this new regulation the market will be reassessed on more reasonable levels with more owners willing to do such business,” said Banchero Costa in a daily note.
New York research firm company McQuilling Services has predicted that the Russian sanctions will boost earnings for product tankers, particularly LR tankers that will benefit from the longer voyages to source non-Russian products for Europe.
