- West Africa remains quiet with limited visibility.
- December cargoes are largely covered, while January remains wide open.
- OPEC+ maintains bullish 2026 demand outlook.
As we approach mid-December, VLCC activity in the Arabian Gulf has been pretty quiet. With few new inquiries and a large number of available ships, the mood has been somewhat subdued. There was a brief moment of excitement when a small batch of prompt cargoes hit the market, but that fizzled out quickly as charterers didn’t show much follow-up interest. By the end of the week, most of the third-decade December shipments were locked in, while January cargoes still faced a surplus of vessels, limiting owners’ chances to raise rates, reports Break Wave Advisors.
West Africa VLCC Market
The VLCC market in West Africa reflected the softer year-end vibe seen throughout the Atlantic. Inquiry levels were low, and the spot market didn’t offer much visibility, with most deals being wrapped up quietly. Although there was a bit of tightening late in the week as some vessels moved towards the Middle East, the drop in available ships wasn’t enough to boost rates without new demand coming in.
Year-End Market Sentiment
Even though there aren’t any immediate catalysts on the horizon, the overall sentiment remains cautiously optimistic. Demand from Asia continues to provide a solid foundation, while longer voyage distances due to geopolitical issues are keeping tonne-mile demand alive as we close out the year.
OPEC+ Reaffirms Bullish 2026 Outlook
OPEC has reaffirmed a positive outlook for demand heading into 2026, predicting global oil demand growth of about 1.4 million barrels per day next year. They expect the demand for OPEC+ crude to average around 43.0 million bpd in 2026, which is a slight increase from 2025 levels. This suggests a generally balanced market, even with a pause in production increases early in 2026. This perspective stands in contrast to warnings from other analysts about a potential oversupply due to rising non-OPEC production and slower demand growth, which could put pressure on crude prices and VLCC demand if it comes to pass.
Near-Term VLCC Fundamentals
Even though there are ongoing worries about oversupply, oil inventories on ships are at their highest levels in a decade, which is helping to keep VLCCs busy in the short term. If refinery demand starts to dip, it might affect liftings, but for now, the balance seems to favor consistent tanker usage.
Long-Term Outlook for VLCCs
The VLCC market is finally starting to recover from a long stretch of fluctuating rates. With fleet growth slowing down, a historically low number of new orders, and changing trade patterns, we can expect to see more volatility in spot rates. Coupled with ongoing geopolitical tensions, these elements should help support freight rates in the medium to long run.
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Source: Break Wave Advisors
