Tanker markets rise as LR2s surge and geopolitics support the market.

Last week LR2 rates surged higher resulting from a supply shortage in the vessel segment which currently experiences very high levels of utilization. The move in LR2 rates also had a positive effect on remaining vessel segments in crude tanker and product tanker markets.

“Ukraine attacks on Russian oil refineries likely to increase crude exports”

Ukraine have been attacking Russian oil refineries with long range drone attacks and following fresh attacks over the weekend, its drones have hit 12 Russian refineries. Russia is the #2 exporter of refined products after the US, but critically for the crude tanker market, Russia has very little oil storage making the export market the likely destination for its crude which can no longer be directed to its destroyed/damaged refineries.

The Houthi’s, the group responsible for vessel attacks driving widespread avoidance of the Red Sea, announced they are ramping up their ambitions, following the addition of hypersonic missiles to their arsenal, according to Splash247. The Houthi’s are looking to expand their attacks deeper into the Indian Ocean to try and prevent vessels from passing Africa via the Cape of Good Hope. This would likely bring even greater dislocation to the market if they are successful with their expanded ambitions.