NWE MR TC2 Market Update

NWE MR vessel supply in the 7-day ahead window stands at 12 ships against a 90-day moving average of 17, placing prompt availability 5 vessels below average. Supply has tightened materially over the week and the model forecast has shifted from mildly bearish earlier this week to neutral today, with spot TC2 at WS 223 and the 7-day ahead forecast pointing to WS 221. The fundamental outlook is improving for owners.

Incremental demand is neutral, which does little to offset the bullish vessel supply picture. While there is still a reasonable volume of cargoes to fix off the UKC, some enquiry has withdrawn from the market. Owners are increasingly reluctant to fix East as the NWE to EoS trade is viewed as a one way with limited backhaul options given the Hormuz crisis, and the focus has shifted to staying within the Atlantic and Med to maximize round trip earnings.

The standout development in the fixture list over the past few days is the Largo Desert placed on subs loading Terneuzen for Japan at $5.45m lumpsum. Jorge Molinero noted today that the NWE to Asia naphtha arb is open on paper for LR2 loadings, with April MOPJ cracks hitting historical highs and NWE premiums at their highest since May 2025.

The South and East Africa pull remains the dominant NWE MR trade, with Royal Chemist fully fixed for South Africa at $3.4m lumpsum, Yasa Flamingo fully fixed for South Africa at $3.3m lumpsum, and Torm Louise fully fixed for South Africa at $3.5m lumpsum. Navig8 Gallantry was placed on subs loading Continent for West Africa at WS 320.

The Amsterdam to Offshore Lome gasoline arb remains open through June. The Amsterdam to Alpha Zone arb provides modest additional support at around +$1/bbl in the green across the forward curve. The ARA to Montreal gasoline arb is close to open for April loadings and already open for May and June.

The USGC remains the most attractive CPP market globally and puts TC2 at a discount to TC14 on a round trip basis, which continues to attract EoS ballasters away from NWE. That said, with supply now 5 below the 90-day average and the list tightening, owners are in a stronger position than the recent spot weakness implies. The near-term bottom in TC2 rates looks increasingly to be in.