A Europe-bound tanker loaded with diesel for Valero stopped mid-voyage in the Atlantic for nine days, before turning around to sail to the Caribbean as the arbitrage, or profit, to ship the middle distillage from the U.S. briefly opened and closed.
The Happy Lady loaded 38,000 metric tons of ultra-low-sulfur diesel on March 24 at Valero's Texas City refinery, according to the OPIS Tanker Tracker. Information is compiled from traders, brokers, and satellite vessel-tracking data.
The Happy Lady then began sailing across the Atlantic and signaled on April 3 that its next destination was the Italian port of Fuimicino, due to arrive on April 13.
However, on April 4, halfway through the voyage, the vessel stopped sailing and circled around the mid-Atlantic within a small area until April 11. Then it signaled it would divert to Santa Lucia, the name of a port in Cuba. The tanker is now due to arrive in four days.
The vessel is most likely heading to Saint Lucia in the Caribbean, and the ship's master, who inputs information about the ship, erroneously entered Santa Lucia.
Some 11 Europe-bound tankers, each with a 38,000-ton cargo of ULSD, are currently tracked on the water and arriving within the next 15 days after loading in the U.S. according to the OPIS Tanker Tracker.
But as many as 10 more tankers were initially provisionally chartered in the past two weeks to make the same voyage but failed to do so. Traders reported the arbitrage to profitably ship diesel to Europe on the spot market opened briefly for about three days towards the end of March, resulting in a spike of tankers chartered to make the voyage and take advantage of the trade.
But it's no longer economic to buy ULSD in the U.S. Gulf and ship it to Europe for sale, amid volatile trading conditions, and the arbitrage closed as swiftly as it opened.
The Happy Lady is likely to be one of many tankers diverted or redeployed from their original Europe voyage as arbitrage economics reverse amid rallying crude prices and falling distillate demand.
