1st of January 2020 is not only a big day for bunkers with IMO 2020 but also a big day for our Aframax and LR2 pools which will become one. The LR2 segment has much potential, unfortunately most of this unrealised, and the segment continues to face stiff competition from both LR1 and MR segments which has meant it’s underperformed Aframax over the past cycles.

Our approach had been to keep a decent amount of the LR2 fleet trading dirty in order to give our partners blended earnings, but a simpler approach for us is to have all the vessels in one pool which leads to quicker decisions on cleaning ships when the time is right and more opportunities to trade the arbs, particularly East to West cargoes helping us to capture stronger Atlantic earnings.

Come January 1st the Taurus Pool will cease to trade and the 11 vessels in the pool will transfer to our Aframax Pool. A slim majority of the Taurus vessels are already trading dirty and we have a couple of decisions on ships coming open soon.

This does mean the Aframax Pool will grow to 40 ships and have a simpler business model: we trade the ships in the best paying markets, clean or dirty. Unlike other pools we don’t pay LR2s a premium, but we don’t discriminate against them either. Pool points remain transparent and based on efficiency rather than specific attributes that may not be utilized.

Dai Matsui remains as Aframax Pool Manager and Erik Brodersen continues to own the CPP strategy giving the Pool leadership team over 45 years of experience and stability.