Oil prices surged above USD 93/bbl after a massive winter storm made its way to Texas yesterday, bringing back memories of this time last year when Winter Storm Uri swept across the Southern United States between 13th and 17th February 2021.

It was a nightmare for the oil refining industry, but one man’s poison is another man’s meat and drink, and it eventually became a much-needed source of support for Clean Tanker markets. As pipelines froze and refineries were forced to shut down, seaborne exports of clean petroleum products from the Gulf of Mexico to all major destinations were initially reduced, as shown below.

At first, this looked bad for Clean Tanker markets. The “MR Atlantic Basket” (an average of earnings on a basket of routes for medium range Tankers in the region) slid from USD 8,900/day in mid February to USD 2,800/day in the final week. However, disruption and dislocation can often work to their advantage. In the weeks and months that followed, Gulf of Mexico shipments to the Caribbean (an important oil storage hub) were replaced from further afield, particularly Northwest Europe, as shown below.

This steadily absorbed available ships in the region, as owners and charterers scrambled to reposition, and vessels were deployed on significantly longer journeys. The MR Atlantic Basket rebounded to almost USD 11,000/day by the end of March 2021.

Could history be about to repeat itself?
Source: VesselsValue (Commentary from Vivek Srivastava, Senior Trade Analyst at VesselsValue)