As Russian troops amassed at the border with Eastern Ukraine last month and hostilities commenced on February 26th, the MR Atlantic Basket climbed steadily from a January 25th low of $5,032 per day to a current year-to-date high of $18,649 per day. Ship-tracking data from satellite and land-based sources confirms this is due to a step up in demand. Laden ton-miles for MR2 Tankers, the most populous type of ship for the carriage of refined oil products, accelerated from 4% (year-to-date, year-on-year growth) in mid-February to 7% at present.
The surge in freight rates was driven by imports into Northwest Europe. As shown in Figure 1 below, laden ton-miles into the region were already on a rising trend as the economy and oil prices recovered from depressed levels a year ago. However, as the crisis escalated, demand spiked to levels far above the upper end of its historical range