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Show Me The Money: Surging bunker prices may weigh on TCEs

20 September 2019

Eastport MR TCE index against actual 1Y TC rate

The Eastport MR TCE index measures the theoretical profitability of a 5-year-old 52kDWT chemical/product tanker carrying bulk chemicals on a typical ME Gulf eastbound voyage, and back with palm oil cargos. Although palm oil freights rose, bunker expenses still outweighed revenues, pointing to a decline in MR TCEs. They fell 4% MoM as compared to mid-August. The recent attacks on Saudi oil infrastructure led to Fujairah bunker values jumping more than 10% this week. If bunker expenses continue to outpace freight gains, TCEs may fall. For more information about TCEs in the other sector, please refer to September’s issue of Show Me The Money: 17kDWT TCEs gained as freight revenues outweighed bunker expenses.

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