Red Sea Crisis: Med, Black Sea Eastbound Suezmax Rates Jump


  • CPC-East Suezmax freight rate hits 10-month high.
  • Owners demanding $1.3 mil premium for Cape detour.
  • CPC Suezmax shipments to Far East fall to 3-year low.

Freight rates for Suezmax voyages loading in the Mediterranean and Black Sea and discharging in the Far East have risen significantly, with sources pointing to the ongoing instability in the Red Sea region, which has made owners increasingly reluctant to send their vessels through the Suez Canal, reports Platts.

Very few owners are still giving the option to transit via Suez

Platts, part of S&P Global Commodity Insights, assessed freight on the 135,000 mt Caspian Pipeline Consortium terminal-Far East route, via the Suez Canal, at a $7.5 million lump sum on Feb. 7, its highest level in nearly 10 months. In January, the rate for this route had stood at an average of a $6.4 million lump sum.

The arb is closed, and [owners] are throwing silly rates at [charterers] asking questions,” a London-based Suezmax broker said.

A Europe-based Suezmax broker said: “Very few owners are still giving the option to transit via Suez.”

Shipbrokers have had difficulties gaging the rate for CPC-East Suezmax runs since the start of the Red Sea crisis, as the potential dangers of sending vessels to the region have caused activity levels to dry up. This meant there were no recent fixtures to use as a reference point.

However, the market was finally confirmed at higher levels after it was reported Feb. 5 that a 130,000 mt Libya-Ningbo fixture had been settled at a $6.5 million lump sum via the Suez Canal, off a Feb. 14 laycan. The fixture also included an option to go around the Cape of Good Hope at $7.8 million.

The premium for a CPC-East Suezmax voyage is usually $1 million over the cost of fixing a Med-East Suezmax voyage, although this figure can fluctuate.

CPC-East Suezmax shipments drop

Suezmax shipments of Kazakh CPC Blend crude oil on the Black Sea-Far East route fell to just one in January, down from eight in the same month in 2023 and an average of six per month over last year, according to S&P Global Commodities at Sea data. This was the lowest monthly export figure for this route since November 2020.

Sources have attributed this fall in volume to the risks involved in sending ships through the Red Sea, and the extra costs involved to detour around the Cape of Good Hope, with owners currently asking for a premium in the region of $1.3 million.

The Cape of Good Hope route also adds about three weeks to a CPC-Far East voyage, according to sources.

It takes 30 days via Suez and 51 days via the Cape of Good Hope, but that’s without including any Turkish Strait delays,” a second London-based Suezmax broker said.

Platts, part of S&P Global Commodity Insights, assessed Turkish Straits delays at 11 days for Southbound voyages on Feb. 7, while Northbound delays were assessed at eight days.

These additional difficulties with CPC shipments have prompted Far East importers to turn to US crude cargoes as a cheaper and more reliable alternative, according to sources.

South Korea is considering starting to take crude from the US rather than CPC,” a second Europe-based shipbroker said.

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Source: Platts