Restrictions on US diesel exports could sharply weaken Atlantic Basin clean tanker demand, with medium-range vessels particularly exposed, Hellenic Shipping News reported, citing BRS Shipbrokers. The prospect comes as simultaneous disruptions to Russian and Middle Eastern supplies have left Europe and Latin America with few readily available replacement sources.
President Donald Trump had raised the possibility of a diesel export ban in response to record domestic fuel prices ahead of midterm elections. However, Energy Secretary Chris Wright said on 23 September that officials were examining several ways to retain more US-produced diesel domestically without introducing a complete ban. BRS warned on 28 September that the consequences for MR earnings could be rapid and substantial.
A full prohibition could halt about 1.35 million b/d of US Gulf diesel exports, equivalent to four MR2 cargoes daily, according to BRS. MR2s transport more than 90% of US diesel exports and would also lose opportunities to combine gasoline deliveries to the US Atlantic Coast with Gulf diesel loadings for Europe. Competition for smaller parcels could spread the pressure to MR1s, while vessels leaving the Gulf in ballast would increase available tonnage elsewhere.
Longer westbound voyages from Asia could provide some support for the wider clean tanker market. BRS identified Saudi Arabia’s Red Sea refineries as a potential source of about 250,000 b/d of additional diesel after repairs to the East-West crude pipeline. Chinese refiners offered another possible source, although BRS considered a substantial increase in throughput and exports unlikely. Preliminary S&P Global Commodities at Sea data put Chinese September diesel exports at 425,100 b/d, their highest since December 2022.
Gibson said on 25 September that more regional long-range tankers were securing voyages from Asia to East Africa and Europe, avoiding lengthy ballast journeys back east. Westbound Middle Eastern and west coast Indian middle-distillate flows were supporting LR demand, while at least 100 coated LR2s operating in dirty service were limiting clean-market availability.
The supply squeeze has increased reliance on US barrels. Commodities at Sea figures cited in the report showed third-quarter Russian seaborne diesel exports falling to 143,000 b/d from 686,300 b/d a year earlier, while Persian Gulf exports dropped to 540,900 b/d from 1.2 million b/d. US exports rose to 1.5 million b/d from 1.3 million b/d. Despite the policy risk, S&P Global Energy Horizons analyst Fotios Katsoulas said MRs retained resilience through their ability to carry diesel, gasoline, jet fuel, biofuels and other clean products.