Combination of factors drives product tanker rates higher
Product tanker rates have increased dramatically across the board (Figure 1). A combination of factors has driven rates to levels not seen since the Covid-induced rate spike in the spring of 2020. All product tanker segments (MRs, LR1s and LR2s) and all regions (both in the Atlantic and in the Pacific) are showing rates well in excess of the earnings in the crude tanker market. This begs the question: Why are product tankers doing so well and is this sustainable?
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