Scorpio Tankers resumes Persian Gulf transit; LR2 to deliver jet fuel to Europe for $10 million

Scorpio Tankers, the world's largest LR2 shipping company by fleet size, has commenced transiting through the Strait of Hormuz, with one of its LR2s chartered by Admic for $10 million to deliver jet fuel in Europe, three sources with tanker brokerages and charterers said June 25.

This marked the first direct clean tanker spot fixture on the Persian Gulf-UK Continent route in almost four months, Platts data showed. Platts is part of S&P Global Energy.

Scorpio President Robert Bugbee had yet to respond to a June 25 request for comment. Admic was not available for official comments at the time of publication.

Scorpio's move reflects a sense of normalcy that is being restored for Strait of Hormuz shipping in a gradual, but highly expensive manner, market participants said.

The $10 million freight for the STI Lotus on the Persian Gulf-UKC route is the highest seen during and after the Middle East war, which disrupted shipping through the strategically vital waterway, market participants said.

A similar freight was also offered a year ago during the Israel-Iran conflict, but it was barely achieved, they said.

Scorpio is now offering more LR2s for loading in the Persian Gulf and the adjoining Fujairah port in the Gulf of Oman, the same three sources said.

Scorpio's offers come at a time when several other tanker companies, including Hafnia, the world's largest LR1 company by fleet size, had yet to resume calling at ports inside the Strait of Hormuz, according to satellite-driven, AIS ship tracking data from S&P Global Commodities at Sea.

This was resulting in the development of a two-tier tankers market, depending on companies' decision to enter or desist routing via the strait, a participant said.

However, as more such direct spot voyage deals are clinched, the number of ship-to-ship transfers will gradually taper off, owners, brokers and charterers have said.

In end-May and the first half of June, at least 15 LR2s were chartered to receive naphtha and distillate cargoes via STS in Oman and India, mostly from Navig8 tankers that have been shuttling back and forth through the risky waters of the strait, Platts data and estimates from tanker brokerages showed.

This was done in a bid to save time. As the Navig8 tankers returned to the Persian Gulf, the STS recipient ships had many more days available to deliver cargoes in Europe and east Asia.

Even Scorpio's STI Lotus was earlier scheduled to receive its jet fuel cargo via STS transfer in Sohar, but it instead managed to enter the Persian Gulf, the same sources added.