The crude tanker market is currently exhibiting firming sentiment and tightening tonnage across the major segments, signaling a robust trend toward year-end.
VLCC Market
The VLCC market has rebounded strongly after a brief downward correction.
- Rate Surge: After dipping below W100, rates for the MEG/East routes have surged, with a fixture recently concluding at W110. This spike is attributed to increased charterer activity following a major industry gathering.
- Tonnage and Demand: The list of available vessels in the Middle East Gulf (MEG) for late November is thinning by the hour, leaving several cargoes yet to be covered.
- Atlantic Pull: The strength in the Atlantic market (driven by Brazil exports and US Gulf activity) continues to attract vessels away from the MEG, which is expected to further erode the early December position list and support a strong market for the segment.
Suezmax Market
The Suezmax segment remains fundamentally firm with tightness in the tonnage supply.
- Short List: The available tonnage list is short, especially for the crucial November 25–30 window and early December. This is exacerbated by VLCC failures to cover some cargoes.
- Rate Leverage: While new West Africa (WAF) activity is rumored, owners are likely to use the extremely aggressive gains seen in the US Gulf market as leverage for higher rates on the TD20 route (WAF/Continent).
- MEG Strength: The strong performance of the MEG VLCC market is keeping owners’ attention and interest in vessels opening in the East, with MEG/East fixtures reported up to W180 (though noted with a “new” charterer). Charterers’ flexibility is diminishing daily, suggesting rate gains are imminent as December dates are worked.
Aframax Market
North Sea
The North Sea market has been quiet but stable, maintaining a firm foundation.
- Rate Level: Rates have held at the WS 160 level despite subdued activity.
- Outlook: Dates are naturally pushing into the third decade of the month, which is anticipated to be a busy period. The limited availability of local tonnage (as vessels look for fixtures elsewhere) suggests potential for rate firming, contingent on whether larger vessels take up available cargo volume.
Mediterranean
The Mediterranean market has seen a pause in rate increases as charterers step back.
- Temporary Stasis: With dates pushed forward, charterers have taken a breather. This, combined with the presence of relet vessels, suggests rates may have hit a ceiling for November dates for the time being.
- Vessel Movement: Prompt vessels that missed the current fixing window are choosing to reposition (ballasting towards the USG) or pursuing other alternatives. It remains to be seen if this breather will last.
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Source: Fearnleys
