Tanker Rates Rally Across Key Segments Amid Rising Demand and Risk Premiums

By
Mfame Editor
-
11

  • VLCC rates surged in the Middle East and Atlantic due to escalating Israel-Iran tensions, with TD3C jumping over 22 points.
  • Suezmax routes saw broad gains, led by West Africa and Mediterranean voyages, reflecting improving demand and geopolitical impacts.
  • Aframax markets experienced regional variability, with firming rates in the Mediterranean and steady gains across Atlantic short-haul routes.
  • Across vessel segments, rising TCEs highlight stronger earnings potential amid shifting risk dynamics in key global routes.

Tanker markets have seen notable shifts in recent days, primarily driven by heightened geopolitical tensions between Israel and Iran. The VLCC segment, particularly in the Middle East, has responded with sharp increases in freight rates, while other regional markets are also experiencing a ripple effect of stronger activity. Similar upward trends are being recorded in the Suezmax and Aframax segments, supported by regional dynamics and shifting demand patterns. These movements reflect changing risk profiles and route economics across the global tanker landscape, as outlined in the latest update from the Baltic Exchange.

VLCC

The Very Large Crude Carrier (VLCC) market is experiencing significant rate increases, especially in the Middle East, driven by rising geopolitical risks. The benchmark 270,000 mt Middle East Gulf to China route (TD3C) has surged by at least 22 points to WS75.8, resulting in a round-trip time charter equivalent (TCE) of $57,758 per day. In the Atlantic Basin, the 260,000 mt West Africa to China route (TD15) recorded a gain of 16 points, pushing rates to WS68.81 and offering a TCE just under $50,000 per day. Similarly, the 270,000 mt US Gulf to China route (TD22) rose by $1,352,500 to reach $7,462,500, translating to a TCE of $35,656 per day.

Suezmax

The Suezmax segment has also recorded stronger rates across all key Baltic Exchange routes. The 130,000 mt Nigeria to UK Continent route (TD20) climbed 12.5 points to WS89.72, generating a daily TCE of $35,251. Rates for the 130,000 mt Guyana to UK Continent route (TD27) moved up by over 12.5 points to WS86.94, yielding a daily TCE of around $33,100 based on Rotterdam discharge. In the Mediterranean, the 135,000 mt CPC to Augusta route (TD6) added 9 points to WS104.1, with daily earnings estimated at $37,800. Meanwhile, in the Middle East, the TD23 route—140,000 mt from the Gulf to the Mediterranean via the Suez Canal—rose 16 points to WS102.5, following increased regional tensions.

Aframax

Aframax rates are showing mixed movement across regions. In the North Sea, the 80,000 mt Cross-UK Continent route (TD7) slipped by 2 points to WS120, reflecting a daily TCE of about $31,700 for the Hound Point to Wilhelmshaven trip. The Mediterranean market saw a firmer tone, with the 80,000 mt Cross-Mediterranean route (TD19) gaining over 8 points to reach WS139.44, offering a TCE of slightly above $32,200 per day. In the Americas, the 70,000 mt East Coast Mexico to US Gulf (TD26) and Covenas to US Gulf (TD9) routes rose 14–15 points week-on-week to WS154 and WS150, respectively, yielding daily TCEs of approximately $32,500 and $30,500. The 70,000 mt US Gulf to UK Continent trans-Atlantic route (TD25) increased by 5 points over the week, reaching WS143.06 and offering a daily TCE of just over $32,100.

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Source: Baltic Exchange