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Transatlantic product tanker rates retreat as Colonial Pipeline reopens

Few tankers fixed at higher levels as Colonial Pipeline linking US Gulf refineries to eastern seaboard consumers of gasoline, jet fuel and diesel resumes operations after cyberattack

Malta-flagged combined chemical and oil tanker Valrossa seen loading at the Lake Charles berth for Citgo, which along with Valero was one of two refineries that received a Jones Act waiver

TRANSATLANTIC tanker rates have deflated almost as quickly as they spiked after two Jones Act waivers and the resumption of operations of the Colonial Pipeline ended additional demand for shipments of refined products to the US east coast.

The two exemptions, granted to Citgo Petroleum Corp and Valero Energy, allow foreign vessels to ship refined products from the US Gulf to the eastern seaboard to replace the shortages of gasoline and middle distillates from the pipeline cyberattack.

The Malta-flagged 2008-built, 50,333 dwt chemical tanker Valrossa (IMO: 9391505) was tracked at Citgo’s berths at Lake Charles on May 17 at 1700 BST, vessel-tracking analysis shows. This suggests that the tanker is the one most likely to be sail for the east coast under the Jones Act waiver.

The 5,500-mile Colonial Pipeline that delivers up to 2.5m barrels per day and 45% of the Atlantic coast’s refined products was closed for five days because of the ransomware attack. The pipeline resumed operations on May 13.

Transatlantic earnings for medium-range tankers dropped 36% in three days to $13,038 per day on May 14, according to the London-based Baltic Exchange.

They had surged to an 11-month high of $20,382 per day on May 11 from $8,842 on May 7, the same day the pipeline was closed.

On May 17 the daily transatlantic tanker rate dipped to $12,324.

The index averages the time charter equivalent rates for a triangulated voyage shipping gasoline to New York from Rotterdam and diesel to the Amsterdam-Rotterdam-Antwerp hub from the US Gulf.

Very few tankers provisionally fixed earlier in the week at these high rates to ship gasoline from northwest Europe ended up going ahead, as news of the Jones Act waivers first materialised.

The Act means only US-flagged, crewed and built ships can operate in cabotage trades.

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