The tanker market’s growing uncertainty is changing the ordering patterns in the 80–120,000 dwt segment, known as the Aframax in crude and LR2 in product tankers. Traditionally, shipowners looking to transport crude oil opted for Aframax tankers, while those focused on refined products ordered LR2s. However, that distinction is becoming blurred, with owners increasingly preferring LR2s over Aframaxes.
An LR2 is essentially a ‘coated Aframax’ comparable in size and cargo capacity. However, it differs in specialised tank coatings and cargo segregation systems that allow it to carry clean petroleum products such as diesel, gasoline, jet fuel and naphtha. Unlike a standard Aframax, which primarily operates in the dirty trade and handles only crude and fuel oils, an LR2 can operate in both trades since it can handle clean products as well as dirty cargo, providing much greater flexibility and thereby commercial versatility
What triggers this shift in ordering?
The flexibility offered by LR2 tankers is increasingly important with the ever-changing structure of oil trade flows. Crude oil transportation is influenced by geopolitical disruptions, OPEC+ production policies, sanctions and changes in refinery configurations, while refined product trades are highly dynamic, driven by refinery expansions in the Middle East and Asia, Europe’s increased reliance on imported fuels and regular arbitrage opportunities between regional markets. Switching a crude tanker to the clean products market is costly and operationally challenging. Tank cleaning requires several days off-hire and substantial expenses, making such transitions commercially unattractive. Dedicated coatings on LR2s largely eliminate these barriers, allowing owners to move between cargo opportunities with far greater ease.
The result is a growing preference for optionality over specialisation. Rather than betting exclusively on crude oil demand, owners are increasingly ordering LR2s that can capture earnings across multiple market segments, a way to hedge their risk. In an industry where trade patterns can shift rapidly due to geopolitics, refining economics or regulatory changes, flexibility itself has become a valuable asset class.
The recent shift in ordering activity suggests that owners are no longer seeking exposure to a single cargo market. Instead, they are investing in vessels that can adapt to an increasingly fragmented and unpredictable global oil trade landscape.
Source: Drewry
