Suezmax freight rates for voyages from Novorossiisk’s Caspian Pipeline Consortium (CPC) terminal to the Mediterranean have reached a year high. Several factors contributed to this increase, reports S&P Global.
Freight Rate Surge
Freight rates on the 135,000 mt CPC-Med route have surged to their highest point since February 19, 2024, reaching $13.72/mt on March 12.
- This increase is attributed to a significant rise in CPC loading volumes, driven by increased production from Kazakhstan’s Tengiz oil field expansion.
- The expansion, which began in late January, is expected to add 260,000 b/d of capacity by the second quarter, equivalent to roughly one Suezmax cargo per day.
- The April loading program for CPC includes 38 Suezmax cargoes, a slight decrease from March’s 41 but a substantial increase compared to historical averages.
- Historical data shows average monthly CPC Suezmax loadings of 22 in 2024, 27 in 2023, and 23 in 2022.
- On March 12th, at least six CPC-Med fixtures were concluded, with the latest at w120, a w20 increase from the prior day.
Limited Impact
Despite a Ukrainian drone attack on the Kropotkin pumping station along the CPC pipeline, which raised concerns about loading disruptions, the tanker market has seen limited impact so far.
- Shipbroking sources indicate that pumping operations are continuing, albeit possibly not at full capacity, and volumes remain substantial.
- Concerns about a potential production cut by Kazakhstan, in line with OPEC+ quotas, have not materialized.
- Increased ton-miles, with significant CPC volumes heading East in March and April, are stretching the tonnage list.
- The impact of a stronger Black Sea market on Suezmax routes from West Africa to the UK Continent and the US Gulf to the Continent has been limited.
- Atlantic basin demand has not been strong enough for shipowners to take advantage of the tonnage shift toward the Black Sea.
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Source: S&P Global
