The global shipping market continues to evolve amid dynamic supply and demand conditions, with notable developments across both the clean and dirty tanker segments. In this report, we examine the latest trends in key regions, focusing on employment patterns, freight rate movements, and the impact of macroeconomic factors on market fundamentals. From the resurgence of Suezmax shipments driven by Chinese demand to the challenges faced by MR2 tankers in the clean segment, these insights provide a comprehensive overview of the shifting landscape in the tanker industry.
Key Takeaways from the Report
Dirty – East of Suez
- Suezmax Employment from WAf to EoS:
- Increased demand for Suezmaxes as Chinese teapots renew interest in West African crude, nearing a 32-month high in November.
- Chinese teapots shift focus due to rising Iranian crude and ESPO Blend prices.
- Suezmaxes gain favour over VLCCs for lower parcelling requirements and efficiency.
Clean – East of Suez
- TC17 Freight Rates:
- Middle East Gulf-East Africa rates remain at 1-year lows despite robust CPP exports.
- Shorter voyages and high MR tanker availability suppress rate growth.
- Refinery maintenance in the region adds pressure to clear excess tonnage.
Dirty – West of Suez
- Guyana Suezmax Voyages:
- Seasonal VLCC loading bans boost Suezmax employment, reaching record highs in Sep-Nov.
- Cargoes primarily head to Europe, increasing Atlantic Basin tonne-miles.
- European demand weakness keeps freight rates under pressure.
Clean – West of Suez
- NW Europe MR2s:
- Low gasoline demand in PADD 1 and WAf pushes MR2s to intra-European trade routes.
- MR2 share on handysize/MR1 routes rose to 54% in November from 26% in July.
- Record-low mileage reflects the challenging CPP market environment.
- Short-lived momentum from the Thanksgiving gasoline demand spike is unlikely to offset broader challenges.
This analysis underscores the complex interplay of regional market dynamics, tanker demand shifts, and broader economic pressures shaping the current shipping landscape.
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Source: Breakwave Advisors
