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Clean tanker ton-miles posted a record quarter over the first three months of the year, a continuation of the acceleration in clean tanker demand which began in the second half of last year. Russian exports accounted for the bulk of the growth, but unlike in the dirty tanker segment, non-Russian ton-mile demand has also been strong. Another difference to the dirty segment is the still considerable potential upside available which could see rates hit new highs.
We have repeatedly called for a sustained opening of the transatlantic gasoline arbitrage in order to help ease the tightness seen in the US market. But is our freight-adjusted arb incentive the best measure to look at? By re-calculating the direct blending of ethanol into margins and arb estimates for a refiner producing and distributing E10, we find that not only are there gains to be made in terms of profitability but also that arbitrage conditions are already much more favorable than those for regular gasoline.
