A few LR1 and LR2 vessels were provisionally booked this week for storage as well as delivery to Asia, but only one is confirmed so far. Zenovia Lady is booked by Vitol at $15,500 a day to store up to 90,000 tons or about 675,000 bbl of jet fuel in the U.K. Continent. Cargo loading was for April 20-25.
The jet fuel inventories in Europe are rising quickly due to reduced demand caused by grounded air traffic.
Since last weekend, volcanic ash spreading from Iceland across Europe and the Atlantic interfered with jet fuel demand as nearly 58% of flights in European airspace were canned.
The first option for physical jet fuel players in the European market is floating storage amid grounded air traffic and rising inventories in Europe.
This is followed by a possibility for players to redirect their surplus jet and ultra-low-sulfur diesel cargos to Latin America, which has been the main importer around the world in the past six months. This could then plug or slow the flow of ULSD out of the Gulf Coast and the Caribbean to Latin America.
The push towards floating storage and possible exports will depend on how long the airport air traffic would remain grounded.
Besides the one confirmed ship booking, another LR2 ship, DL Iris, was
provisionally booked by an undisclosed charterer to store 90,000 tons of jet. Cargo loading was slated for April 25-30.
A third LR2 ship, Iasonas, was booked to load up to 90,000 tons of fuel on April 23, but the fixture was said to have failed on Wednesday. The Stena Poseidon was booked to load 60,000 tons on April 22-24, and the Estia was fixed to load the same volume on April 27-30. These ships could be for jet storage or naphtha delivery to Asia.