Valuation differential: U.S.-built vs. Internationally-built MR Tankers

$2 billion: that's the valuation differential between the U.S.-built Jones Act MR tankers and similar internationally-built MR tankers.

Back-of-the-envelope math:

Based on Maritime Partners, LLC 2023 fleet purchase, a 14-year-old Jones Act MR tanker is worth approximately $75 million.

There are currently 43 Jones Act MR tankers on the water with an average age of 14 years.

43 vessels x $75 million per vessel = $3.2 billion valuation of Jones Act MR vessels on the water

Based on shipbroker values, a 14-year-old international MR tanker is valued at $28 million.

To compare with the Jones Act MR tankers on the water...

43 vessels x $28 million per vessel = $1.2 billion valuation of a matching international fleet

$3.2 billion - $1.2 billion = $2 billion valuation differential

Why is that $2 billion number relevant? It's the minimum the US government would need to pay out and split between the existing Jones Act MR tanker owners should there be a realistic proposal to remove the US-built requirement from the Jones Act.