USGC MR rates press higher as incremental demand surges and the ceasefire proves a false dawn

USGC MR vessel supply in the Freight Supply and Demand (FSD) model’s 7-day ahead window stands at just 6 ships against a 90-day moving average of 11. Incremental demand remains robust and is the dominant signal in today’s market outlook. With 6 open ships against two dozen vessels of incremental demand, the FSD model projects rates to firm sharply from WS 540 to WS 647 over the coming week into the 14–23 April load window.

Yesterday’s ceasefire headlines briefly rattled the market, with a couple of vessels on subs released as a result. As the session developed it became clear the Strait would not reopen as initially expected. Neil Crosby noted this morning that day one of the ceasefire was a failure on multiple fronts; Hormuz traffic did not change, the IRGC continued to publish navigational advisories including maps showing deployed sea mines in the channel, and attacks on Saudi infrastructure including the East/West pipeline continued. His base case is that at least another four weeks of very reduced Hormuz flow should be expected, with rising chances of a much longer period. For TC14, nothing has changed materially: the underlying dynamics that have driven this market tighter are firmly intact.

The arb picture is broadly supportive of continued USGC cargo demand. Houston to San Jose gasoline is open across the full curve from April through July, providing consistent Central America demand. Houston to Santos diesel is open in April at +1.30 cpg and widens significantly through the summer. Houston to Buenos Aires diesel flips into positive territory from May at +16.20 cpg, building toward +23.25 cpg in June. Houston to Barcelona and Rotterdam diesel arbs are closed for April loaders, though both were open recently.

Fixture activity over the past three days captures a market repricing decisively higher. Ocean Malou was fully fixed loading USG for Brazil at WS 610 for a 16 April laycan, and STI Gramercy is on subs on the same routing at WS 640 for 14–15 April dates, confirming the Brazil trade continues to absorb prompt USG tonnage at elevated levels. Esteem Energy is also on subs USG to Brazil at WS 600 for a 15 April laycan. Magic Chemist was fully fixed loading USAC for UKCM at WS 500 for an 8 April laycan.

TC14 paper markets reflect the fundamental spot conviction behind the rate outlook. Balmo traded at WS 495 firming to WS 500, and April at WS 500. Although May traded from WS 390 softening to WS 370. Panama Canal northbound auction fees and queue times continue to restrict natural resupply helping to keep the Atlantic list historically short. Charterers covering April requirements should act promptly with owners retaining leverage. Spot rates to remain supported with May paper to reprice higher after the ceasefire noise yesterday.