USGC MR Market Report (Sep 28 2026)

The open MR count in the US Gulf has gone from 33 ships on 21 September to 6 on Friday. Charterers and exporters are pulling forward every cargo they can before a potential US diesel export ban becomes policy rather than just talk. Vessel supply now sits at 6 ships in the seven-day ahead window against a 90-day average of 18, with incremental demand at 4 vessels and the Freight Supply and Demand (FSD) model forecasting spot from WS 272 up to WS 287 into the 3 to 12 October load window. The list has been thoroughly emptied.

Transatlantic and Brazil have been pulling the bulk of cargo demand, and both are supported by wide open arb margins. Transatlantic enquiry came first, with MH Ibuki taken USGC to UKC at WS 257.5 for a 30 September laycan, Hafnia Caterina lifting USAC to UK Continent Med and Hafnia Ane on subs on the same routing. The Houston to Rotterdam diesel arb remains wide open at +$34.25/mt for October and widens to +$59.25/mt for November and +$47.50/mt for December, with Barcelona at +$63.00/mt for October and +$38.00/mt for November. Europe is short diesel supply and paying up.

Brazil demand is strong alongside the transatlantic demand. Astrolight went USGC to Brazil at WS 297.5, Ainazi at WS 292.5 and Murmure at WS 275 earlier in the week, all for end-September and early-October laycans, against Houston to Buenos Aires diesel open at +$33.30 cpg for October and +$28.90 cpg for November loaders and Santos arbs improving through the Q4 strip at +$0.15 cpg, +$4.35 cpg and +$9.25 cpg.

Paper rallied further on Friday. October traded at WS 325 and Q4 at WS 320, higher on the day pricing the spot vessel tightness and strong demand. The more interesting mispricing is now further out the curve.

The TC14 forward curve is structured as follows: from WS 320 in October it goes to WS 309 in November, WS 300 in December, WS 264 in January, WS 259 in February and WS 255 in March, then drops to WS 201 for Q2 2027 and WS 161 for Q3 2027. In freight terms the curve sees deep backwardation come 2027. This implies USGC MR demand and econs will worsen into next year.

The USGC loading forward diesel arb margins say otherwise. The Houston to Rotterdam forward curve remains positive in every single month out through the start of Q4 2027, at +$54.90/mt for October loading, +$59.35/mt for November, +$44.60/mt for December, +$43.10/mt in February, +$47.50/mt in April and still +$10.65/mt in October 2027. Houston to Santos turns materially positive from November at +$2.75 cpg and builds to +$21.35 cpg in July 2027, staying open the whole way. Barcelona is open in 11 of the 14 months on the board and Aliaga in the Med in 9 of 14 months.

There is no month on the forward curve where the USGC has no demand outlet for diesel. It is rare for the forward arb margins to be so open and so outright supportive of the TC14 forward curve.

This disconnect is worth buying. A wide open forward curve across the board for arb margins implies that the TC14 curve is materially undervalued deep into next year. A curve at WS 201 to WS 161 for summer 2027 is a curve that assumes the arb complex closes for an extended period.

Deferred TC14 is materially undervalued against the current cargo economics and the likeliness of protracted conflicts in Iran and Ukraine keeping global diesel stocks tight. This also aligns with trading houses taking MRs on 6 to 9 month time charters. The expectation is that the forward earnings curve is underpriced and will roll up to spot.

A diesel export ban can still upend this forward outlook, but for now the 2027 TC14 paper strip is a buy.

About the Author
Michael Ryan | Commodity Owner, Freight, Sparta Commodities
Michael Ryan, our Freight Commodity Owner at Sparta, brings over a decade of experience with Trafigura in the energy sector managing risk across products and regions before becoming Head of Risk for subsidiary Puma Energy. Michael then joined the Trafigura commercial team trading freight while successfully growing the physical fleet through strategic dealmaking.
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