Meg-To-East Asia VLCC Voyages Display A Rebound In March

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  • MEG-to-East Asia VLCC voyages displayed a rebound in March, indicating a bounce back of enquiries from the East.
  • LR2 utilisation for MEG/India CPP exports to the West of Suez have climbed to multi-year highs in March.
  • Russian CPP volumes at sea have seen a surge recently, mostly propelled by diesel or gasoil volumes, with a couple of factors likely at play.

This week, in the East, Braemar discusses the reasons behind the muted activity on TD3C and divergent MR and LR2 behaviour on the East/West routes. Over in the West, Braemar focuses on the role that a prospective sanctioning of Venezuela could play in the freight market, and Braemar examines the drivers behind the recent surge of Russia diesel at sea.

TD3C freight rates remain flat

  • MEG-to-East Asia VLCC voyages displayed a rebound in March, indicating a bounce back of enquiries from the East although loadings still remain below 2023 averages.
  • TD3C freight rates remain flat on a w-o-w basis, partly due to the Easter break lull and a lower number of enquiries for April loading dates which has brought an increase in the available tonnage; currently at the highest levels for the year.
  • After the recent sanctioning activity which brought payment delays and diversion of Russian-origin cargoes, Indian refiners have reportedly turned increasingly to spot cargoes. This could create an additional pocket of demand for VLCCs on the MEG-to-India route, supporting rates out of the Middle East. However for now, our analysis reveals that most of India’s imports of Russian crude are not on these tankers

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MR2 vessels may pivot to more lucrative routes

  • LR2 utilisation for MEG/India CPP exports to the West of Suez have climbed to multi-year highs in March.
  • This is due to higher diesel/gasoil and naphtha exports to Europe, with combined CPP exports reaching the highest level since last September. Additionally, diversion of vessels through the Cape of Good Hope amid the Red Sea attacks boosted voyage distances.
  • Conversely, MR2 utilisation from MEG/India to the West of Suez has sunk to multi-year lows as of end March, weighing on overall tanker utilisation on this route. As a result, MR2 vessels may pivot to more lucrative routes especially in the Asia Pacific region where utilisation remains high.

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Read the full article here.

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Source: Breakwave Advisors