The past week (roughly May 22-29, 2025) has seen a notably slow period for VLCC (Very Large Crude Carrier) activity in the tanker market. This sluggishness, at least on the surface, has been a key factor in pushing rates down across various regions, reports Fearnleys.
VLCC
The sentiment in the shipping market is currently deeply bearish, with a clear perception of oversupply despite efforts by some charterers. This situation is being driven by several factors:
- Internal Programming by Charterers: A significant amount of cargo is being covered through charterers’ internal programming, meaning they are fulfilling their shipping needs with their own or long-term contracted vessels, rather than actively seeking tonnage on the open spot market. This reduces fresh demand.
- China Inc “Uber” Bookings: The term “China Inc ‘Uber’ bookings” suggests a scenario where Chinese entities, potentially through large-scale, aggregated demand, are efficiently securing vessel capacity in a way that further limits open market opportunities for independent owners. This could be akin to a large platform consolidating demand and dictating terms.
- Littered Position Lists with Relets: The market is still burdened with a high number of “relets” – vessels that are chartered in by one party and then re-chartered out to another. These relets add to the overall supply of available tonnage, putting downward pressure on rates as they compete for scarce cargoes.
This combination of factors creates a challenging environment for independent owners, as the availability of easily accessible cargo on the spot market is scarce. The market is described as being “on the verge of ‘catching a falling knife’ territory, if not already there.” This idiom signifies a dangerous situation where attempting to buy into a rapidly declining market can lead to significant losses, as the bottom has not yet been reached.
Suezmax
The global tanker market is currently displaying a nuanced picture, with varying sentiment across different regions and vessel segments.
West Africa: The week started with fairly active conditions in West Africa, with a good spread of second-decade dates for fixtures. With tonnage lists appearing more balanced and an expectation of increased volumes, the fundamentals seem to be shifting in favor of owners. Despite a last-done rate of WS 76 for West Africa/UK Continent (UKCM) routes, owners are not expected to easily break below WS 80. The outlook suggests rates will remain steady, with potential for upside.
Across the Atlantic (US Gulf/UKCM): There remains a shortage of locally available tonnage in the US Gulf. It is considered unlikely that vessels from the UK Continent will ballast to the US Gulf for Transatlantic (TA) voyages due to a significant disparity in Time Charter Equivalent (TCE) earnings when comparing USG/TA routes versus the TD20 (West Africa/UK Continent) route. However, a weak Aframax floor (with 145kt x WS 55.5 being repeated) and the presence of relets on the front end of the list may prevent rates from responding as expected to the tightening supply.
Middle East Gulf (MEG): While a few deals have surfaced in the MEG, owners require significantly more volume this week for any sustained momentum to build. For Basrah/Westbound candidates, supply is not abundant, yet rates remain subdued. This is attributed to a strong appetite among both owners and retailers to reposition their vessels back to the West. For Eastbound voyages, the tonnage complexion is far more favorable for charterers, leading to continued downward pressure on rates.
Aframax
North Sea
- The start of the week was slow due to it being a short week.
- Ekofisk production maintenance in June is significantly impacting cargo availability. This is a planned shutdown of fields in the Ekofisk area and the Nordpipe system, expected to last about four weeks, leading to sharply reduced crude exports.
- The presence of a “smattering” of Suezmax vessels (larger tankers that can sometimes compete for similar cargoes or indicate broader market weakness) is also contributing to a lack of early stems (cargo bookings) for Aframaxes.
- Surrounding areas are also experiencing slower and softer market conditions, limiting options for Aframax vessels to seek better opportunities elsewhere.
- June is projected to be a challenging month for Aframaxes in the North Sea.
Mediterranean
- The short week also began quietly in the Mediterranean.
- Owners are actively searching for any fixing opportunities, indicating a struggle to secure cargoes.
- The tonnage list for the Mediterranean/Black Sea is lengthy, with more than 20 vessels open by the end of the upcoming weekend (excluding Red Sea positions). This oversupply of available ships will inevitably test owners’ resistance on rates.
- Surrounding areas do not offer attractive alternative markets.
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Source: Fearnleys
