- VLCC rates surged over 50% on MEG/East routes, driven by geopolitical tensions and market uncertainty.
- Suezmax activity picked up in the West, while MEG rates remained firm amid regional instability.
- Aframax rates in the North Sea corrected slightly despite active trade; Med rates held steady with varied tonnage positioning.
- Market sentiment remains cautious but firm across all segments, particularly in geopolitically sensitive zones.
Tanker markets saw notable developments over the past week, with rate movements reflecting geopolitical tensions and shifting trade dynamics. The VLCC segment experienced a sharp rate surge, particularly on Middle East Gulf (MEG) routes to Asia, influenced by the ongoing Israel-Iran conflict. Suezmax and Aframax markets showed mixed trends, driven by regional supply-demand balances and specific cargo movements. These insights are based on the latest update from the Fearnleys Weekly Report.
VLCC
The VLCC sector witnessed a significant boost in rates, with MEG to East routes climbing by more than 50% since the previous Wednesday. This spike is largely attributed to heightened geopolitical uncertainty, particularly due to the Israel-Iran conflict and concerns about possible U.S. involvement.
The market appears divided, with some owners opting to lock in current gains around WS 69-70, while others anticipate further gains, especially as Saudi July loading schedules remain undisclosed. Meanwhile, in the Atlantic, activity continues steadily. A USG to China voyage was fixed at USD 7.25 million, with indications of rates reaching USD 7.5 million, still lagging behind Brazil and West Africa to East trades, where earnings remain stronger due to closer alignment with MEG-linked rates.
Suezmax
The Suezmax market saw increased activity in the West, with several vessels taken on subjects. Approximately 9–10 million barrels remain to be lifted from West Africa in the first ten days of July. Vessel availability looks balanced enough to prevent sharp rate hikes. Notably, vessels opening in the UKC may avoid ballasting toward the U.S. Gulf, given current TCE disparities.
In the USG, a WS 72.5 rate was confirmed for a cargo left over from last week. While vessel supply appears healthy, the limited presence of ballasters may add slight upward pressure. In the MEG, eastbound cargoes were reported at WS 115 amid balanced tonnage and ongoing regional tension, leaving room for further rate escalation.
Aframax
In the North Sea, despite strong activity last week, rates underwent a minor correction. Fixtures are now focused on end-of-month loading dates, and available tonnage, including relets, appears sufficient to keep rates stable in the short term. In the Mediterranean, a brief period of bullish sentiment led owners and relets to secure available cargoes swiftly.
Ceyhan to Med route benchmarks remain around WS 135 for late June and early July loadings. Although the tonnage list has grown, a few vessels are expected to shift focus outside the Mediterranean and Black Sea, which could influence rate trends to move sideways.
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Source: Fearnleys AS
