America’s Midsize Tanker Trade Adjusts To TMX Pipeline Dynamics

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  • The shipping industry is navigating several challenges and uncertainties that may impact freight rates, travel times, and trade flows, particularly in the Americas and global markets
  • The intertrade dynamics between midsize tankers such as Suezmaxes and Aframaxes continue to impact freight rates and trade patterns in the Americas.
  • Rates for Suezmaxes are often lower than for Aframaxes, leading to shifts in ship class preferences for charterers.
  • This has resulted in Aframax rates being capped by the more economical Suezmax rates.

Evolving Trade Flows

Europe and countries in Asia are seeking alternative sources of crude oil to supplement sanctioned Russian Urals barrels. This shift in trade patterns has made voyages from the Atlantic Basin to Europe and Asia more favorable for tanker vessels.

Trans-Mountain Pipeline Impact

The Trans-Mountain Expansion pipeline in Canada is expected to increase crude exports from West Coast Canada by 590,000 b/d, potentially influencing trade routes. This could impact the availability of Aframax vessels and freight rates in the region. Uncertainty remains around how this pipeline will affect spot pricing and trade dynamics.

Potential Disruptions

Delays in the Panama Canal and changing trade routes due to conflicts such as the Iran-Israel situation may pose additional challenges for the industry. The ongoing unpredictability and shifting trade flows make it essential for market participants to stay agile and adjust strategies accordingly.

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Source: SP Global