LR Tankers: Freight Squeezes Naphtha Arb

According to Gibson, “the spread itself is not the problem. It averaged about $65/mt in October, swinging between $45/mt and $120/mt, well above the $20-45/mt range that held through most of 2025. In March, it sat comfortably above the cost of moving naphtha from the Med to Japan, and Western barrels flowed. Since then, freight has risen far faster than the spread. LR2 Med/Japan freight has eased by around a quarter from its mid-October peak, but still sits well above the spread on a per-tonne basis. The arbitrage is technically shut, but cargoes are still moving, albeit in smaller volumes and increasingly on smaller ships”.

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