The product tanker fleet is shifting decisively towards dirty trades. On 30 October 2026, 402 of the 542 LR2 tankers tracked by Signal Ocean were employed in crude or dirty product trades — 74.2% of the fleet, and the highest proportion in nearly two years. Nearly three-quarters of LR2 tankers are carrying crude oil and dirty petroleum products. A year earlier, the ratio was close to balanced.

59 More LR2s, but 87 Fewer Trading Clean

On 1 January 2025, 256 LR2s were employed in crude and dirty product trades and 227 in clean product trades — a dirty share of 53.0%. Over the following ten months, the total fleet grew from 483 to 542 vessels, while the dirty-trading fleet expanded by 146 vessels and the clean-trading fleet shrank by 87. The vessel counts remained unchanged through 7 November.

Over that period, the LR2 population grew by approximately 12%, while the clean-trading fleet fell by 16.5%. The shift was not confined to LR2s. At the end of October 2026, 84.3% of the combined Aframax and LR2 fleet was employed in dirty trades, up from 76.2% at the start of the year. The proportion of clean-trading LR2s operating on the spot market fell from 49.8% to 45.7% over the same period. The vessel counts remained unchanged through 7 November.

'Clean' and 'dirty' describe cargo categories. Clean products include naphtha, gasoline, jet fuel, kerosene and gasoil, while dirty products include crude oil, fuel oil, vacuum gasoil and dirty condensate. The categories also refer to the tanks and lines used to carry the cargo. An LR2 can be reassigned between clean and dirty service, but each switch requires cleaning and preparation.

The shift in employment carries a more immediate consequence for the clean market: the effective supply of clean capacity is falling even as the nominal fleet grows. Each vessel that moves into dirty trades leaves fewer available to carry clean cargoes. On 30 October 2026, only 140 LR2s were trading clean — a fall of 87 vessels, or 38.3%, in under a year. The effect is particularly acute in spot markets, where only 64 clean-trading LR2s remained. The number of clean-trading LR2s available on the spot market has fallen by 43.4% in ten months.

Although the share of dirty-trading LR2s peaked at 74.2% on 30 October, it has since eased slightly. Over the past week, two vessels switched to clean trades while one switched to dirty trades. The shift in employment has not been steady. In April 2025, clean-trading LR2s briefly outnumbered dirty-trading vessels, with 258 vessels trading clean and 251 trading dirty. In May 2025, dirty-trading LR2s again pulled ahead and their share continued to climb. By late September, it had reached 70% for the first time since mid-2023. In October, the share rose above 70% and reached 74.2% on 30 October.

What stands out is not only the scale of the shift but also its duration. The share has now remained above 70% for more than six consecutive weeks — the longest such stretch since October 2023, when the share reached 71.7% before declining to a low of 47.1% on 22 August 2025. The current period has exceeded that earlier peak and has lasted longer than any other in the past two years.

TORM CEO: Nominal Fleet Growth of 7%, but Clean Capacity Down 4%

TORM's chief executive, Jacob Meldgaard, explained the dynamic at the company's third-quarter 2026 results presentation. The nominal fleet had grown by about 7% year on year, but the available clean capacity — after allowing for vessels that had moved into dirty trades — had contracted by approximately 4%. The shift has also been reflected in fleet utilisation. On 30 October 2026, 93.1% of LR2s were employed, a slight decline from 94.8% at the start of the year.

The divergence was already visible in 2025. In the first half of 2025, the product tanker fleet expanded by approximately 5%, while clean capacity grew by only 1%–2%, Meldgaard said. Xinde Marine News previously examined how the rise in dirty trading had affected fleet productivity.

A closer look at the fleet data shows that the clean sector has been losing vessels throughout 2026. The clean-trading LR2 fleet began the year at 227 vessels and fell to 206 by 31 March, 169 by 30 June and 158 by 30 September, before reaching 140 at the end of October. Over the same period, the number of dirty-trading LR2s rose from 256 at the start of the year to 276 by 31 March, 334 by 30 June, 373 by 30 September and 402 by 30 October. The pattern is equally clear across the combined Aframax and LR2 fleet. On 1 January 2025, 1,004 vessels were trading dirty and 314 were trading clean. By 30 October 2026, dirty-trading vessels had increased to 1,174, while clean-trading vessels had fallen to 219.

Why Crude Trades Attract LR2s

TORM attributes the migration mainly to the economics of crude oil transport. Crude is typically carried over longer distances than refined products, generating more tonne-miles per vessel. The company's long-haul crude volumes grew by 25% year on year, while its clean volumes declined by 3%. Crude oil exports from the Atlantic basin have been a key driver. Exports from Brazil, Guyana and the United States have risen, while crude from the Middle East has increasingly moved into the Atlantic basin. Rising global crude output has also helped. OPEC+ raised production by 2.6 million barrels per day between March and October, while Brazil added 370,000 barrels per day of crude exports and Guyana added 340,000 barrels per day. With crude exports growing faster than refined product exports, TORM expects tanker demand to remain weighted towards dirty trades.

Longer crude routes are consuming additional vessel capacity. In the third quarter, the average haul length for TORM's crude cargoes increased by 11% year on year, compared with only 1% for refined products. The average crude voyage length reached 6,400 nautical miles, equivalent to 40 days at sea, while the average clean voyage was 3,800 nautical miles, or 24 days. When a vessel is fixed for a long-haul crude voyage, it is effectively removed from the clean market for the duration of the voyage and the subsequent ballast leg.

The rerouting of Russian crude oil and products following EU sanctions in 2022 has also contributed. Since then, crude and oil products have been transported over longer routes, with cargoes from the Atlantic basin moving to India and China, and Russian cargoes moving to the same destinations. The resulting longer voyages and more complex trade patterns have absorbed additional tonnage. The dark fleet is a further factor. TORM estimates that around 900 tankers operate outside mainstream compliance frameworks. Such vessels are often deployed for sanctioned oil shipments, while mainstream owners' vessels have absorbed some of the longer legitimate trade routes left behind. The effect has been to lengthen voyages for compliant owners as well.

Shuttles and Offshore Transfers Absorb Further Vessel Time

Other factors are also reducing the available clean capacity. In Brazilian and Guyanese waters, floating production, storage and offloading (FPSO) units have used shuttle tankers to load crude for direct export to Asia. TORM estimates that such trades have tied up approximately 7 million deadweight tonnes (dwt) of Aframax/LR2 capacity. In recent weeks, up to 12 vessels have been queuing at a time for loading at these offshore terminals, and 2–3 vessels per month have been deployed for short-haul shuttle duties. The result is that more vessels are spending longer periods waiting at terminals or completing offshore transfers, rather than carrying clean products.

A substantial portion of the fleet is also operating at low speeds. On 30 October 2026, 22.6% of LR2s were sailing at speeds below 9.5 knots. Slow steaming, whether due to weak freight demand or operational constraints, reduces fleet productivity. Over the past decade, the average speed of LR2s has fallen from 12.3 knots in 2015 to 11.4 knots in 2025, further reducing the tonnage available to carry cargoes.

Returning to Clean Service Takes Time and an Earnings Incentive

The dirty trading that absorbs so much of the LR2 fleet does not preclude a return to clean service. An LR2 that switches to crude or fuel oil must be cleaned before it can return to clean products. The process typically takes about three weeks, and the tanks and piping must be cleaned to a standard that protects the quality of the next cargo. With the current market conditions, owners have little incentive to move vessels back to clean trades. The premium for clean freight over dirty freight is only about US$2,000–US$3,000 per day, which is insufficient to compensate owners for cleaning costs, time off-hire and the risk of failing the next cargo inspection.

According to TORM, the earnings gap is decisive. In the third quarter of 2026, LR2s trading dirty earned an average time charter equivalent (TCE) of US$53,600 per day, compared with US$38,000 per day for LR2s trading clean. The difference — about US$15,600 per day, or 41% — explains why owners have kept vessels in dirty trades. Unless the clean market improves relative to the dirty market, or the premium for clean freight increases, owners will have limited incentive to return vessels to clean service.

TORM's Next Demand Drivers: Recovering Exports and Inventory Rebuilding

TORM expects demand to strengthen in the coming months. Refined product exports from the Middle East and India are expected to recover as refineries complete maintenance and return to full operation. In addition, the global inventory drawdown that began earlier in the year is expected to reverse as refineries complete turnarounds and begin rebuilding inventories. Both developments would support clean product demand and could slow, or even reverse, the recent decline in the clean fleet. The developments to watch are whether the number of LR2s trading clean begins to recover, whether the earnings gap between the two markets remains wide, and whether the demand recovery for clean products materialises.