How Conflict in the Middle East is Impacting Maritime
Roughly 70 LR2s, equivalent to 154 MR2s in dwt terms, have reportedly dirtied up so far this year, as the crude market considerably outperformed the oil products market. The predominant market for product carrying LR2s is out of the Middle East Gulf, but with the region’s cargo availability constrained and waters risky, earnings potential for ...
In the past year, an estimated 70 LR2 tankers, which amount to 154 MR2s in deadweight tonnage, have been damaged, according to recent reports. The crude market has outperformed the oil products market, but the Middle East Gulf region, which is the primary market for product-carrying LR2s, has faced constraints in cargo availability and risky waters.
Despite the conflict that began in late February, LR2s have performed remarkably well, with recently clean-trade vessels benefiting from the shift to dirty trades. If the Strait of Hormuz becomes a safer route, regional refineries could supply more LR2 cargoes, potentially benefiting medium-sized vessels as larger units exit the market.
However, the Gulf conflict's impact on global gas prices remains puzzling, as JKM prices have doubled since the conflict began but are still below 2022 levels. This discrepancy can be attributed to factors like inventory draws, demand rationing, and increased coal-fired generation, as well as a surge in North American export volumes, with US LNG exports up 22% year-to-date.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.