As many as 35 oil tankers that usually carry crude or fuel oil could switch to carrying cleaner products like diesel and jet fuel in the next two months as shipowners chase higher profitability, oil analytics firm Kpler said in a LinkedIn post.

An “LR2” (long-range 2) type tanker typically carries cargoes of about 90,000 metric tons of cleaner fuels. For an Aframax tanker, which carries a similar volume, to switch to an LR2 it would need to be cleaned thoroughly of contaminants which could spoil gasoline or middle distillate cargoes.

“Record high LR2 productivity and declining Aframax productivity have set the stage for a significant switch from dirty to clean,” Kpler said.

Kpler added that spread between the cost of chartering LR2s carrying clean products and Aframaxes carrying crude and fuel oil hit a record high of $60,000 a day last week, amid tightness in LR2 capacity as Houthi attacks in the Red Sea force vessels to take longer voyages around Africa’s Cape of Good Hope.

Only a switch from dirty to clean could ease this tightness, Kpler added.

“Analysis of the spread between LR2 and Aframax fleet productivity suggests between 15 and 35 vessels could make the switch,” Kpler said, a move which could help ease LR2 rates slightly.
Source: Reuters (Reporting by Ahmad Ghaddar and Robert Harvey; Editing by Kirsten Donovan)