The crude tanker market continues to face pressure this week, especially across the VLCC segment, as the summer doldrums weigh on demand. While certain regional trades, like USG exports, have shown marginal resilience, the overall tone remains subdued.
Suezmax and Aframax segments have also experienced a slow and steady pace with limited room for rate improvements. Here’s a closer look at how each sector is performing.
VLCCs: TD3C Hovers Near WS 50, Outlook Remains Bearish
It’s been a rough week for VLCCs, with fixtures consistently falling just below the last. TD3C has dropped to just above WS 50, but the psychological floor of WS 50 is expected to break shortly. West Africa and Brazil trades, closely tied to the MEG pool, are echoing the same weakness.
While USG cargoes have seen slightly better rates due to limited tonnage and restricted loading windows, this is more an exception than a trend. A weak tone persists overall, and expectations remain soft for the short term.
Suezmax: Plenty of Tonnage, Limited Urgency
West Africa remains tonnage-rich, including several relets and discounted vessels back in play. With the three-week fixing window stretching into mid-August, charterers are taking a measured approach, adding to the sluggish pace.
USG rates are flat due to tepid demand and competition from Aframaxes, which are working at equivalent economics (145 x 58). Although MEG-India routes saw some activity, much of the cargo is believed to have been covered quietly, reducing visible demand indicators.
Aframax: Flat Sentiment Across North Sea and Mediterranean
In the North Sea, July dates are nearly wrapped up, and August stems appear light, especially from ECUK. Relets may return to the market, but with nearby regions also underperforming, Aframax owners are unlikely to gain much traction.
In the Mediterranean, early August stems were mostly covered last week, and charterers now face a narrow tonnage list upfront. CPC loadings have nudged rates higher, though X-Med trades have yet to follow suit. Notably, Ceyhan loadings are on hold due to cargo contamination, adding uncertainty to the market.
Rates Snapshot: Downward Drift Across the Board
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VLCC MEG/West: WS 29 ▼1
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VLCC MEG/Japan & Singapore: Both at WS 50 ▼2 and ▼4 respectively
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WAF/Feast: WS 50 ▼5
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Suezmax WAF/USAC: WS 77.5 ▼2.5
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Aframax N. Afr/Euromed: WS 137.5 ▲7.5 (a rare bright spot)
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Caribs/USG: WS 115 ▼15
1-Year Time Charters remain flat:
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VLCC: $51,500/day
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Suezmax: $35,000/day
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Aframax: $28,000/day
VLCC Availability (MEG): 135 ships ▼5
Fixtures (Global): 69 ▼10
The crude tanker market continues to reflect seasonal weakness and oversupply, particularly in the VLCC segment. While a few regional exceptions show resilience, rate pressures remain broad-based. Unless demand picks up or tonnage thins, especially in the MEG and WAF, the market is likely to remain soft in the near term. Owners across vessel classes may need to navigate cautiously through August, with few signs of immediate recovery.
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Source: FEARNLEYS
