Aframax

And why everyone wanted to go through Prince Rupert or thereabouts was because you can hold a larger tanker, what we call a very large crude carrier, a VLCC tanker.

Carney is committed to doing the upgrades in the Port of Vancouver to move it from what they can carry now in Afromax, which is a much smaller vessel, more expensive to transport oil, to be able to handle those VLCCs.

And that was the real goal.

And so, you know, I would say those concerns are largely assuaged.

But the dynamics are a bit different between the two markets.

So unlike crude, where the extreme surge in VLCC rates from the Mideast Gulf has kind of pushed all other markets higher as well, and it has also filtered down to the shorter hold, Suezmax and Aframax markets as well, we have not seen the same situation in the clean tanker markets.

So the transatlantic MR freight rate has not really followed the extreme jump in long-range steel rates from the Mid-East Gulf.

And we are only now seeing it pick up.

The VLCCs carry 2 million barrels.

Smaller tankers, Suez Max or Afromax tankers carry around a million barrels.

So if you can get more VLCCs through, then the volume of crude you're moving through is going to increase.

These ships are also very large, which makes them, I think, somewhat more resilient to attack.

And this is sort of that, that two-tiered trade between CPP and DPP, because in that first week rush, there'll be massive demand for MRs from the US Gulf Coast, and then that will drop off.

But in one to two months, there'll be increased demand then for your Aframaxes and your Vs loading out of the US Gulf Coast, and there'll be a lot of Aframax demand heading to Europe-

Yeah

... and increased V demand heading to Asia.

Uh, but now freight has caught up so quickly, and it's looking pretty much shut again.

Okay.

On the MOPAC 180 and the MOPAC 380, we have seen a trend that they are currently all assessed by Platts as a netback from Singapore using Kuwait to Singapore, Aframax ADKT, which is, uh, TD8.

With the Strait of Hormuz traffic still very iffy, TD8 has actually blown out so massively relative to, say, Fujairah to Singapore.

They're moving less.

The six-hour transfers are usually Afromax to Afromax, maybe 700,000 barrels.

The big ones take a day or more.

The six-hour window is for the smaller ships.

Um, since mid-August, they have been standing at over a lump sum nine million, which corresponds to over $100 per ton.

Uh, but we should admit here that the US-Iran war is not the only, I think, driving rates up, but it's also soaring, uh, Aframax rates.

Aframax and LR2s are the same class, but one is for crude and one is for clean.

Um, so a disrupted crude trade following the US-Iran war has, uh, caused Aframax rates to soar, and it has pulled tonnages into the crude market, which has drawn on the available supply for clean trades and has pushed rates up.

Particularly the US to Europe and the Black Sea to the Mediterranean, Aframax rates have been strong, and they have drawn on the tonnages f- available for clean, clean trades.

And if they switch to the Aframax to the crude class, can they not just switch back again?

Um, they cannot easily switch because they require substantial cleaning and are often discounted for at least three voyages following the switch.

Also, different clean products have different cleanliness levels, and jet fuel charters would generally be the slowest to commit to a freshly cleaned vessel.