In a report issued Tuesday afternoon Court Smith of MJLF & Associates noted several medium-range (MR) product tankers on order at US yards are scheduled to hit the water this year and next.
Upon completion the forecaster argued that some of these 50,000-dwt vessels will opt to pursue clean cargoes instead of focusing on the coastwise carriage of US crude.
“Many of the tankers that had previously moved clean product to the southeast Atlantic coast were pulled for use in crude service [in recent years],” Smith continued.
“With the addition of new Jones Act tonnage, we expect to see more clean product move from the US Gulf to the legacy clean product trade that existed prior to the US tight oil boom.”
While Smith believes overseas refineries will continue to ship clean cargoes to the eastern US he argued that activity in this corner of the market might wane in the coming years.
“This will be a net positive for Jones Act tonnage, and potentially clean MRs as tankers move on longer voyages from the Arabian Gulf,” he added.
The analyst noted that, due to the recent expansion of refining capacity in the Arabian Gulf, the US will likely see an increase in clean imports from this.
Smith believes this will result in the displacement of some European volumes, which would, in turn, benefit ton mile demand in the international product tanker segment.
