Aframax rates have strengthened in the US Gulf and Caribbean in the wake of Hurricane Ida, but MR markets have failed to retain earlier gains amid severe tonnage oversupply.

The Category 4 storm made landfall in Louisiana on 29 August, forcing the closures of oil refineries and upstream production fields in the US Gulf.

While energy firms have gradually been bringing those facilities back online in recent days, observers believe it could be weeks before normal operations are restored.

The disruptions have prompted a spike of aframax earnings in regional trades, with emergency requirements and reduced vessel supply due to stranded vessels, according to market experts.

The Baltic Exchange estimated spot aframax earnings for the east coast Mexico-US Gulf trade at $9,756 per day on Tuesday, up from -$755 per day on 27 August.

Spot earnings on the Caribbean-US Gulf route rose from -$1,698 per day to $6,426 per day in the same period.

“US refiners will need to source more overseas crude with outages persisting, so short-haul aframax demand should benefit,” Gibson Shipbrokers research head Richard Matthews said.

“Likewise, weather-related tonnage supply issues will also have a positive impact.”

Louisiana Offshore Oil Port (LOOP), the only US port capable of receiving fully laden VLCCs, has also been shut for repairs in the hurricane’s aftermath.

“With LOOP under repair, some more aframaxes might be needed to discharge VLCCs arriving in the US Gulf,” Matthews said.

As for the product tanker trade, MR earnings in northwest Europe had enjoyed a brief spike following the Gulf disruptions as traders rushed to lift European gasoline for US demand.

But brokers said shipowners quickly lost ground due to sufficient tonnage supply, while charterers can step back due to the end of summer driving season.

Spot earnings for the northwest Europe-US Atlantic coast trade rose from $2,797 per day on 27 August to $5,838 per day on 31 August, before a collapse to -$7 per day on Tuesday.

“The general sentiment for the cargo loaded from North Europe was positive because… the Ida hurricane,” shipbroker Banchero Costa said in a note.

“The large availability of tonnage, however, did not support MR owners in keeping the rate up.”

Separately, MR earnings on the US Gulf-northwest Europe route fell to -$5,556 per day on Tuesday from $3,065 per day on 27 August.

“We would expect less exports from the US Gulf, which may average at lower levels due to Ida-related outages and pending seasonal refining maintenance, which usually peaks in October,” Matthews said.