The recent trends in MR (Medium Range) tanker voyages to the South America West Coast highlight shifts in short-haul voyages that are gaining traction, primarily from nearby regions such as the US West Coast and South America West Coast. These routes have shown a year-on-year (y-o-y) increase in activity in four out of the last five months. However, voyages originating from more distant regions, including the US Gulf, Southeast Asia, and Northeast Asia, have remained relatively subdued.
Potential Shift in Voyage Patterns
Looking forward, several factors could alter these trends:
- Atlantic Basin CPP (Clean Petroleum Products) Demand: An anticipated weakening in demand in the Atlantic Basin, likely due to an influx of petroleum products reaching Europe, might reduce the need for regional MR tanker trips within the Atlantic Basin.
- Panama Canal Normalization: As transits through the Panama Canal stabilize, US Gulf flows may redirect toward the Americas West Coast. This shift could lead to longer voyages for MR tankers originating from the US Gulf, which would increase tonne-miles in this region.
Impact on Tonne-Miles
If US Gulf exports pivot more towards the Americas West Coast, the average voyage distance will grow, thereby supporting the tonne-mile demand for MR tankers—a key metric for measuring the transport work done by vessels. This trend could help balance the currently subdued long-haul voyages and maintain momentum in the tanker market, particularly benefiting routes from the US Gulf.
The shift will depend on changes in both regional demand patterns and canal transit availability, making this an area to watch for potential opportunities for MR tanker operators.
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Source: Breakwave Advisors
