Navigating Shifts: Trends In VLCC And Suezmax Ballast Voyages


  • In this article, we delve into the trend of declining average mileage for VLCC and Suezmax ballast voyages in the East.
  • We explore the factors contributing to this trend, including reduced crude import demand from China and surplus supplies from the Mideast Gulf and Russia.
  • Additionally, we analyze the implications of this trend on freight rates and vessel employment in various tanker markets.

The maritime industry is witnessing a notable shift in the average distances covered by VLCC and Suezmax tankers during ballast voyages. This shift is influenced by several factors, including changes in crude oil demand and supply dynamics, as well as geopolitical events impacting trade routes. Understanding these trends is essential for stakeholders in the shipping and energy sectors to make informed decisions regarding vessel deployment and market strategies.

Factors Driving Shorter Voyages

  • Reduced Crude Import Demand from China: Weaker appetite for crude oil imports in China has led to decreased demand for long-haul voyages from Asia to West of Suez, impacting VLCC and Suezmax ballast voyage distances.
  • Ample Supplies from Mideast Gulf and Russia: Surplus crude oil supplies from the Mideast Gulf and Russia have further contributed to the slowdown in Atlantic Basin crude purchases, affecting vessel deployment and freight rates.

Impact on Vessel Employment and Freight Rates

  • MR2 Tanker Market Dynamics: The exodus of MR2 tankers from Russian trade due to lower export volumes has intensified competition for vessel employment in the MR2 market, leading to lackluster freight rates.
  • Opportunities in Alternative Markets: Despite challenges in traditional markets, opportunities have emerged in the Mediterranean and East Asia for tankers leaving Russian trade, offering potential avenues for employment and revenue generation.

Outlook for Aframax Market

  • TMX Pipeline Opening: The opening of the TMX pipeline has generated anticipation for increased Aframax demand; however, availability has yet to see a significant surge.
  • Potential Demand from NE Asia: Signs of demand from Northeast Asia for Vancouver loadings suggest a positive outlook for long-haul Aframax voyages, providing support to the market amidst previous employment challenges.

Challenges in Atlantic MR Market

  • Muted Demand and Declining Freight Rates: Despite the approaching summer driving season, demand for Atlantic MR tankers remains subdued, reflected in declining transatlantic freight rates.
  • Increased Panama Canal Transits :Favorable weather conditions in the Panama Canal have led to an increase in transits, facilitating MR tonnage movement between basins but potentially exacerbating vessel oversupply in the Atlantic.

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Source: Breakwave Advisors


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