LR2 surge, LR1 recovery, and MR resilience shape the Mideast Gulf market

The Mideast Gulf clean tanker market displayed mixed performance over the past week, with differing trends across vessel classes.

While LR2 and LR1 segments showed fluctuations influenced by shifting demand and tonnage availability, the MR market demonstrated stability, supported by steady trading activity.

Freight rates for LR2s rose from WS100 to WS115 on Japan-bound routes, driven by mid-December loading requirements and increased naphtha purchases from Asian petrochemical producers. The tightening of available tonnage in this segment further reinforced the upward pressure on rates.

Conversely, the LR1 segment experienced weaker demand early in the week, with rates dropping to WS105 before rebounding to WS110. Slower cargo nominations and lower demand compared to LR2s affected its performance, though late-week inquiries for eastbound routes provided moderate support.

The MR market remained steady, with rates holding at WS170 for East Africa-bound shipments and WS160 for South Africa. Regular cargo flows to South and Southeast Asia underpinned this stability, highlighting the segment’s critical role in regional trade.

Looking ahead, LR2 rates are expected to remain supported by tight availability and sustained demand, while the MR market is likely to maintain its stable trajectory. The LR1 segment may continue to exhibit sensitivity to demand fluctuations, influenced by competition and shifting trade flows.

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