Back-to-front: transatlantic reversal

Back-to-front: the transatlantic MR back-haul of 38,000t of gasoil US Gulf/UK Continent on a round voyage basis now pays shipowners more than the front-haul of 37,000t of gasoline UK Continent/US Atlantic Coast, prompting questions of the arrival of the long-expected reversal. US Gulf exports have been boosted by high US refinery utilisation (at 92%+), continued high cost of Renewable Identification Numbers (RINs) which make it costly to supply the product for domestic consumption and increasing supply from Venezuela following the restart of PDVSA's 180,000 bpd crude unit at the 635,000 bpd Amuay refinery. In contrast high USAC gasoline stocks are curbing import demand, causing the back-haul to outstrip the front-haul. Whilst most believe US Gulf/UK Continent will eventually become the de facto front-haul, it may be a choppy ride getting there. Rising WTI prices may begin to curb US Gulf exports as refining margins are cut, whilst a recovering US economy will likely consume more product domestically for industry and manufacturing, with falling unemployment boosting gasoline imports, especially if the government intervenes in the costly RIN situation.
Source: ICAP Shipping