Tanker markets are witnessing a period of mixed sentiment and shifting fundamentals. Despite some fresh cargoes emerging, freight rates across VLCC, Suezmax, and Aframax segments are facing downward pressure in several regions. Owners are holding out for demand spikes, while charterers are navigating tight windows and rate volatility to secure tonnage at more favorable levels.
VLCC: Eyes on June Cargoes Amid Thin End-May Activity
Despite the influx of end-May Middle East Gulf (MEG) cargoes, VLCC rates have seen limited movement. The MEG/East benchmark is currently around WS 60, though with May’s program nearly concluded, attention is turning to June stems. Charterers are reportedly already probing early June positions, suggesting underlying nervousness.
The balance in the MEG position list and control of tonnage by fewer owners may support a rate uptick once fresh cargoes emerge. Meanwhile, Petrobras’ end-May Brazil export cargo was re-fixed a third time at WS 61, reflecting some fragility in sentiment.
In the Atlantic, charterers have the upper hand due to scarce USG export volumes and an oversupplied list, though a more balanced tonnage profile is gradually emerging.
Suezmax: Tightening Lists, But Limited Rate Movement
Suezmax activity has seen more behind-the-scenes fixing, with charterers tucking vessels away quietly. Front-end lists are tightening in the Atlantic, and a robust June CPC program is expected to inject volume soon. As the 1st decade approaches, activity is anticipated to increase. The market appears to have bottomed in the West.
In the US Gulf, local and European Suezmaxes have been drawn into Liza and USG business, helping clear backlog and rebalance supply. However, owners are still facing headwinds on rate gains due to tight competition and cautious chartering behavior.
Aframax: Mediterranean Plunge Continues as Oversupply Grows
North Sea
Aframax rates have softened further amid subdued activity and limited fresh demand. The window is now shifting into the third decade, with tonnage looking to relocate to avoid waiting. Some Suezmax stems have absorbed volume, keeping Aframax availability high.
Mediterranean
The Med Aframax market is in freefall as excess tonnage forces owners to accept lower rates. Barring an unexpected demand surge, current levels may persist or drop further for the rest of May, with owners left few options but to endure the downturn.
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Source: Fearnleys
