- Crude oil flows from the Arabian Gulf to China have increased by 22% in October, despite Middle Eastern tensions.
- Aframax and Suezmax routes show strong gains in freight rates, while VLCC rates see a weekly decline.
- Tonne-days growth for different tanker segments remains mixed, with signs of recovery in Aframax but ongoing declines in VLCC and Panamax sectors.
Week 42’s market monitor focuses on the rise in crude oil barrels transported from the Arabian Gulf to the Far East, specifically China. Despite ongoing Middle Eastern tensions, Saudi Arabia continues to play a key role. There was a significant increase in the volume of crude oil transported in October, following a dip in September, reports Breakwave Advisors LLC.
October Crude Oil Imports Show Strong Growth
“October presents strong signals for a significant increase in the monthly quantity of tonnes (barrels) imported from these regions.”
Following a 13% decrease in crude oil exports in September, October figures suggest a 22% rise from September and an 11% increase compared to the previous year. This rebound signals steady demand for oil imports in China despite geopolitical tensions.
Tonne-Days Growth from Arabian Gulf Remains Steady
Growth in dirty tonne-days from the Arabian Gulf to China remains consistent with the previous year.
However, uncertainty lingers as winter approaches, typically driving higher demand for energy and heating supplies.
IEA Adjusts Oil Price Forecast for 2025
The IEA has revised its Brent crude oil price forecast for 2025 down to $78 per barrel, a $7 reduction from the previous month’s forecast.
This reflects concerns about slowing demand growth, supply chain issues, and geopolitical factors. “The IEA now predicts that Brent crude will average $78 per barrel in 2025.”
Firmness in Aframax and Suezmax Markets
While Aframax and Suezmax markets show positive trends, VLCC rates on the MEG-China route have fallen by 4% in Week 42. Suezmax rates surged by 30% on West Africa to Europe routes and the Baltic Mediterranean route.
Aframax Mediterranean rates also rose by 48% in October, continuing the strong performance from late September.
VLCC Rates Decline on MEG-China Route
Freight rates for VLCCs on the Middle East Gulf (MEG) to China route reached WS55, reflecting a 4% weekly decline, though rates remain 2% higher than the previous month.
Annual comparison shows a 12% drop in rates compared to the same period last year. “VLCC MEG-China freight rates reached 55 WS, reflecting a 4% weekly decrease.”
Suezmax and Aframax Freight Rates Show Significant Gains
Suezmax rates for West Africa to Europe and the Baltic-Mediterranean routes surged by 30% over the past month. Aframax Mediterranean rates spiked by 48%, representing a strong rebound from September lows.
These rises signal robust demand in these regions. “Suezmax freight rates for shipments from West Africa to continental Europe surged to 100 WS, reflecting a 30% increase over the past month.”
Downward Trend in LR2 Freight Rates
LR2 freight rates from the Arabian Gulf are currently around WS120, marking a 13% drop over the past month.
This decline continues a downward trend observed in week 38, indicating potential further weakening by the end of October.
Steady Panamax Rates in the Caribbean
Panamax Carib-to-US Gulf freight rates remained steady around WS140 for the first half of October.
However, these levels represent a 29% drop compared to the same period last year, signaling weaker demand in the region.
Decline in MR1 and MR2 Rates
MR1 rates for Baltic-Continent shipments increased slightly after an early October drop but remain 20% lower than last month. MR2 rates from the Continent to the U.S. East Coast fell by 40% year-on-year, with MR2 rates on the US Gulf-Continent route dropping 40% weekly but still 30% firmer than last year.
“MR2 rates for shipments from the continent to the USAC have fallen to WS85, indicating a 40% annual decrease.”
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Source: Breakwave Advisors LLC
