The tanker market is experiencing mixed trends across different vessel classes, with some segments facing downward pressure on rates while others are showing limited downside. The primary factors influencing the market include the conclusion of August cargo bookings, the anticipation of September stems, and varying tonnage availability in key regions.
VLCC Market
The VLCC market, after a strong upward trend, has seen rates come under pressure this week as the final August cargoes in the Middle East Gulf (MEG) were covered. While rates have softened from their recent peak of WS 57.5, they are still holding above the WS 50 mark. This stability is expected to continue, with a “landslide” back to the low WS 40s not anticipated. This is partly due to the recent announcement of increased production from OPEC+ starting in September, which could provide renewed support for the market.
Suezmax Market
The Suezmax market is currently showing signs of weakening fundamentals in both supply and demand. The availability of tonnage in West Africa has increased, while demand for August volumes is nearly exhausted. This has led to a test of rates down to WS 112.5, with further losses expected as September dates begin to be quoted. However, the market may find some support from the CPC (Caspian Pipeline Consortium) route, where the number of available vessels for early September is not particularly long. Vessels from the UK Continent are also expected to be in contention for these cargoes, given the greater stability of that route.
Aframax Market
North Sea
The North Sea Aframax market has seen a reduction in available tonnage, with vessels leaving the area and quiet fixing taking out some capacity for the third decade of the month. This thinning of the early list has limited the downside on rates, as viable alternative options for charterers are coming into play. However, the projected list for the end of the month shows some relets returning to the area, which may temper market activity.
Mediterranean
In the Mediterranean, the available tonnage appears plentiful on paper for the remainder of August. However, upon closer inspection, many of these vessels may not be suitable for specific cargoes or charterers, which could lead to rate fluctuations. While rates are currently sideways, the market is expected to be sensitive to specific dates and voyage requirements.
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Source: Fearnleys
