- Dirty oil shipments from the Arabian Gulf to the Far East are recovering, with an 8% rise in December and a 17% increase year-over-year.
- Rates across VLCC, Suezmax, and Aframax segments continue to decline, with some routes seeing drops of up to 60% compared to last year.
- Crude tanker availability is declining, which may support freight rates post-Chinese New Year.
The dirty freight market is facing a mix of challenges and recovery signals. While VLCC’s tonne-day growth shows signs of stabilizing, freight rates for key routes continue to weaken. A tightening vessel supply, especially in the Arabian Gulf and the Mediterranean, may influence market sentiment in February, reports Breakweave Advisors,
VLCC Tonne-Days Show Signs of Stabilization
January marked a turnaround for VLCC tonne-days from the Arabian Gulf to the Far East after hitting record lows.
The 8% monthly increase in shipments and a 17% year-over-year rise indicate growing demand, particularly from China and India. If this trend continues, it could support a freight market rebound in the first quarter.
Freight Rates Decline Across Key Segments
The weakening sentiment in dirty freight markets is evident in falling rates across major routes.
VLCC Middle East Gulf-China rates dropped 5% below the annual average, while Suezmax and Aframax rates on Mediterranean and Baltic routes are down 30-40% year-over-year.
Aframax Mediterranean rates fell to WS 120, marking a steep 40% decline compared to last year.
Vessel Availability Tightens, Potentially Supporting Rates
A drop in crude tanker availability could help stabilize rates. VLCC Ras Tanura ship count has decreased by 24 since December, and Aframax Mediterranean vessel availability remains below the annual average.
This trend, if sustained, could bolster freight rates following the Chinese New Year.
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Source: Breakweave Advisors
