This week, the MEG (Middle East Gulf) LR2 (Long Range 2) tanker market has shown signs of stabilization. The TC1 index, which tracks 75,000-tonne cargoes from the MEG to Japan, has remained relatively consistent throughout the week, hovering around the WS152.5-155 level. Similarly, the assessment for TC20, covering 90,000-tonne cargoes from the MEG to the UK-Continent, has held steady just below the $4 million mark, reports Baltic Exchange.
VLCC
The VLCC (Very Large Crude Carrier) market continued its downward trajectory this week.
- Middle East Gulf to China (TD3C): The rate for a 270,000 metric ton (mt) voyage decreased by approximately 2 Worldscale (WS) points, settling at WS57.25. This corresponds to a round-trip time charter equivalent (TCE) of $36,465 per day.
- Atlantic Market:
- West Africa to China (TD15): The rate for a 260,000 mt voyage saw a marginal decrease of less than one WS point, reaching WS59.75, resulting in a round voyage TCE of $39,906 per day.
- US Gulf to China (TD22): The rate for a 270,000 mt voyage experienced a significant drop of $17,500 compared to the previous week, assessed at $8,645,000. This translates to a daily round-trip TCE of $46,055.
Suezmax
Suezmax rates have experienced downward pressure this week:
- The rate for the 130,000 mt Nigeria/UK Continent voyage (TD20) has fallen by 8 WS points to WS94.72. This equates to a daily round-trip TCE (time charter equivalent) of $39,389.
- In contrast, the TD27 route (Guyana to UK Continent basis 130,000 mt) has remained more resilient due to support from the US Gulf export market, falling by only 3 WS points to WS96.94. This translates to a daily round-trip TCE of $40,339 based on discharge in Rotterdam.
The CPC (Caspian Pipeline Consortium) terminal is facing significant operational issues:
- Problems between the USA and the CPC terminal operators, further complicated by OPEC concerns regarding potential overproduction by Caspian oil field producers (Exxon and Chevron), have led to authorities reportedly shutting down the two Suezmax berths at CPC.
- This has resulted in fixture cancellations, and the remaining April Suezmax cargo stems are now uncertain.
- Consequently, the rate for the TD6 route of 135,000 mt CPC/Med has so far decreased by 10 WS points to the WS120 level, showing a daily TCE of approximately $54,500 for a round trip. However, further declines are anticipated in the coming days and weeks.
In the Middle East, the rate for the TD23 route of 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) has also slipped by 3 WS points, closing near WS90.
Aframax
Aframax tanker market movements:
- North Sea (TD7 – 80,000 mt Cross-UK Continent): Rates continued their upward trend, increasing by another 5 WS points to WS135.42. This translates to a daily round-trip TCE of just over $49,200 (basis Hound Point to Wilhelmshaven).
- Mediterranean (TD19 – 80,000 mt Cross-Mediterranean): Rates experienced a significant pullback, falling by 19 WS points to WS176.11 (basis Ceyhan to Lavera). This yields a daily round-trip TCE of just under $56,700.
- Atlantic (TD26 – 70,000 mt East Coast Mexico/US Gulf & TD9 – 70,000 mt Covenas/US Gulf): The volatile market continued with substantial increases.
- TD26 rates rose by 33 WS points to WS225.83, resulting in a daily round-trip TCE of $65,358.
- TD9 rates climbed by 31 WS points to WS222.19, yielding a daily round-trip TCE of $58,497.
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Source: Baltic Exchange
