LR2s have been the strongest performing asset class in tankers in 2024 so far with a year-to-date average of $68,000 a day and a rate bracket ranging from $40,000 a day to $100,000 a day, according to new analysis from Jefferies, an investment bank. This compares to the $40,000 a day average seen during the second half of 2023 and trading range of $20,000 a day to $60,000 a day. Spot rates have risen to around $60,000 a day this week for non-eco tonnage, up from $53,000 a day last week.
LR2 (Long-range 2) type tankers, which typically have a 115,000 tonne deadweight (dwt), are more flexible than aframax vessels.
In Q1, according to Braemar, average earnings for LR2 tankers jumped at the start of February, peaking at $100,000 a day before decreasing to $54,000 a day in early March. They closed the quarter up at $90,000 per day.
Data from Kpler shows there was a record 793bn clean tanker ton-miles in Q1, a 10% increase. Growth was driven by the LR2 and MR segments, responding to Red Sea disruptions and higher exports from Russia, China, and South Korea.
“Fundamentals in the LR2 market are robust, with laden voyage counts at record-setting highs and freight rates well-above 2023 averages,” states a recent report from Vortexa, a freight rate platform, who note that the split between LR2s trading clean and dirty is currently at par.
“The continued prospect of high tonne-miles and rates for LR voyages due to rerouting around the Cape of Good Hope will likely absorb the vessels switching from dirty-to-clean,” Vortexa noted.
