The direct negotiations between the United States and Iran, which began in April 2025, over curbs to Iran’s nuclear program in exchange for sanctions relief are ongoing. A fifth round of talks concluded on Friday, May 23, 2025, in Rome, following four previous rounds. Talks between Iran and the European Union also took place last week in Istanbul, Turkey, reports Gibson.
Crude Oil
Here’s a detailed breakdown of the recent tanker market performance across different regions:
East
- VLCCs: Activity in the VLCC market in the East significantly slowed down towards the end of the week. Charterers held back new inquiries after completing their early June programs, leading to a softening of rates. With ample tonnage available, owners are likely to face further downward pressure next week, exacerbated by public holidays in the UK and US on Monday. This could prove to be a challenging week, with current rates for the Arabian Gulf (AG) to China route at WS60 and AG to US Gulf (USG) at WS31.
- Suezmaxes: Inquiry for Suezmaxes in this region was “drip-fed” into the market throughout the week, allowing tonnage to accumulate. The only substantial volume of inquiry came from India, contributing to a correction of rates downwards. Select tonnage targeted for western runs managed to achieve levels around 140 x WS45 via the Cape of Good Hope, while transit via the Suez Canal is expected to be around the WS90 level.
- Aframaxes (Asia): Demand in Asian Aframax market failed to keep pace with supply, allowing charterers to capitalize on weak sentiment. A northbound run even saw new lows of WS110 on an oil relet, just when the market seemed to have bottomed out. While there was a brief bounce in rates mid-week due to replacement jobs and private deals, this momentum was short-lived due to the region’s overall lackluster demand. The only silver lining is that the tonnage list remains relatively balanced.
West Africa
- VLCCs: It was an underwhelming week for VLCC owners in West Africa, with only a handful of fixtures observed, remaining close to previous levels. Going forward, rates could come under pressure if adjacent markets soften. However, a positive factor is that the tonnage list is not excessively populated, as many ballasting vessels bypassed West Africa in search of cargoes further west. Any increase in activity for the second half of June could counteract charterers’ attempts to drive rates below current levels, which are estimated around WS61 for West Africa to East voyages.
- Suezmaxes: Mid-week, there was a noticeable lack of visible inquiry from West Africa for Suezmaxes. However, a decent amount of off-market inquiry managed to reduce the available tonnage. As the week closes, the TD20 route (Nigeria/UK Continent) is trading below WS80, pushing towards the mid-70s. The market awaits a fresh test of these levels in early trading next week.
Mediterranean
- Suezmaxes: The Suezmax Mediterranean position list was very healthy at the beginning of the week. This led to negative corrections in fixing levels from CPC (Caspian Pipeline Consortium) and cross-Mediterranean stems, with CPC now trading towards mid-June around the WS100 level. With the long weekend in London, significant upside in fixing levels is unlikely in early trading next week.
- Aframaxes: Rates in the Mediterranean Aframax market reacted positively and progressively this week. An uptick in activity towards the end and beginning of the next windows gave owners the upper hand in negotiations as available tonnage shortened. Rates gained a rapid 12.5 points for a benchmark Ceyhan to the low WS130s. Notably, premiums were applied for shorter flat periods, and with CPC requiring larger Aframaxes, the differential has widened to approximately 20 points, with 145 and 150 levels being done there. However, looking ahead, this recovery is likely to be a small cycle, with the US market remaining lackluster and the North Sea market struggling at basement levels, offering little support.
US Gulf/Latin America
- VLCCs: A scarcity of inquiry for US Gulf exports resulted in a downturn in VLCC rates for both long East and UK Continent routes. The increasing number of eastern ballasting vessels entering the region is likely to neutralize owners’ ability to turn the tide in their favor. While the second half of June should see more activity and the market may take time to recover, it is believed to be close to the bottom of this downward shift. Brazil export inquiry was also quieter than in previous weeks, causing freight rates to dip towards the end of the week. Current estimates for US Gulf to China are $7.85 million and Brazil to China at WS59.
North Sea
- Aframaxes: In the North Sea, the low rates achieved by shuttle tankers negatively affected sentiment, often forcing natural tonnage to follow suit. However, as the week progressed, a higher-than-expected number of cargoes emerged, allowing owners to recalibrate levels closer to historical norms. WS122.5 and WS125 became the target levels. While these numbers might not seem exciting, they offer acceptable returns for those meeting their dates, especially given the subdued conditions in the US and Mediterranean markets.
Clean Products
East
- LR2s and LR1s: Lists for both LR2s and LR1s remain tight for immediate availability. A healthy supply of both openly available and off-market cargoes has helped rates hold at previous levels, with some routes even seeing slight increases. For instance, the TC1 route (likely Middle East Gulf to Japan/Far East for LR2s) is currently in the WS150-155 range. A UK Continent destination for LR2s is on subjects (meaning a deal is pending final agreement) at $4.15 million. The TC5 route (likely Middle East Gulf to West for LR1s) is on subjects at 55 x WS170; however, for vessels that are “non UMS” (meaning they require continuous machinery space attendance, typically older vessels) and under 15 years old, owners are expected to ask for 55 x WS175. The UK Continent market for LR1s remains somewhat untested, but assessed at $3.2 million via the Cape of Good Hope. With Eid al-Adha on the horizon, owners are hopeful that next week will bring increased cargo volume as charterers look to finalize bookings before the holiday.
UK Continent
- MRs (Medium Range Tankers): It was a volatile week for MRs. The failure of a 37 x WS130 UKC/TA (UK Continent to Transatlantic) deal related to an Ultra-Low Sulfur Diesel (ULSD) arbitrage play caused rates on this route to plummet to 37 x WS115 early in the week. However, the drop in rates combined with a tight early window led to a mid-week rebound. As the week concludes, 37 x WS155 has been achieved for Baltic and Brofjorden Transatlantic routes, and owners remain confident due to a significant clearing of tonnage. With another short week ahead and June dates largely untouched, the start of next week could be interesting, especially with improvements in the US Gulf market drawing in ballast boats from the US East Coast and Europe/Caribbean. Currently, the UK Continent is primarily dealing with laden tonnage, as ballast boats are scarce.
- Handysizes: From Monday to Wednesday, there was consistent demand in the Handy sector, mainly for cross-UK Continent (XUKC) voyages, with some UKC/Mediterranean routes also being quoted. This led to a tightening of available tonnage for prompt positions. Some charterers resorted to using MRs to cover their short-haul needs after Handy rates firmed to 30 x WS180 for XUKC. The week ended with a slower pace, and with the weekend and a UK bank holiday on Monday, ships could firm quickly and repopulate the list. The market is steady for now heading into the weekend.
Med
- MRs: The MR tonnage list in the Mediterranean was tight at the beginning of the week. However, with the UK Continent market taking until mid-week to gain momentum, rates in the Med drifted sideways, with 37 x WS120 being the average. By mid-week, the North Sea market had picked up, and a stem from Sines (Portugal) then pushed Med rates higher, aligning them with other loading regions.
- Handysizes: The Handy market was where this mini-rally originated, suggesting it might also be where a decline could begin. Nonetheless, rising US Gulf rates are likely to divert ballast units away from the Med, potentially leading to a shortage of available vessels. It was a varied week for Handies in the Med. Rates started the week at 30 x WS150, with owners optimistic for further firming after last week’s positive movement. Rates jumped to a high of 30 x WS225, which some felt was too rapid. After a slower Thursday, rates began to soften, with the last reported deal at 30 x WS187.5. With the long weekend approaching, charterers are expected to seek further rate corrections.
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Source: Gibson
