Where Ageing Tankers Go


Weekly Tanker Market Report 

Last year saw a notable increase in tanker demolition, recording the second-highest number of tankers (above 25,000 dwt) scrapped since 2020 on the back of depressed industry earnings.

Scrapping in the Suezmax segment has been more active compared to VLCCs; yet the percentage of ageing tankers in these categories is proportionally similar, with vessels built-in 2003 or earlier accounting for 14% of the existing fleet.

Once these units commence trading sanctioned barrels, they disappear from the mainstream international market.

Yet, export data provides further evidence of the inefficiency of illicit operations.

Kpler estimates that between May 2021 and April 2022, Venezuela and Iran exported 0.55 mbd and 0.73 mbd respectively.

With more and more ageing vessels moving into illicit “closed” trades, there are not many takers in this age group left in the conventional market, particularly if vessels involved in fuel oil/crude storage are taken out of the equation.

Crude Oil 

Middle East 

VLCC’s interest throughout the week has held up with some respectable fixing in terms of volume; unfortunately, this has not really resulted in Owners being able to push for much higher levels due to the overabundance of tonnage for the region.

Last done for the East has moved up to 270,000mt x ws 43.5 to China and one fixture to the Cont returning 280,000mt x ws 24.75 via Suez.

Increased fixing levels in other regions have pushed rates here.

Increased optionality for Suezmax Owners has boosted sentiment and despite cargo volumes not being majorly up, what has been worked has seen positive increments on last done levels.

A whirlwind week for Aframaxes in the AGulf region.

Rates bottomed to 80,000mt x ws 180 early on and then activity whipped up, clearing a large chuck of tonnage from the list.

West Africa 

A culmination of increased WAF and Americas activity has enabled Suezmax rates to firm here. WAF/UKCont-Med, currently being traded, is likely to settle at around 130,000mt x ws 97.5-100, with a voyage East around ws 105-107.5. Owners’ sentiment has been very strong, whilst fundamentals haven’t quite equated to rates pushing on much further. With VLCCs close to capping Suezmaxes, Owners were always going to be brought back to reality. VLCC levels have been stable throughout the week, with only limited interest for Eastern destinations. A potential part cargo enquiry to the Continent has been added to the menu but it hasn’t left the specials’ board just yet, as we are yet to really see any real movement on the Suezmax levels. Last done East is 260,0000mt x ws 45, with levels around ws 50 being paid to the Continent. 


The Mediterranean Aframax market has found a natural resting place, as most cargoes achieve last done or very close. Owners have reached a resistance level of between 5 and 10k TCE and will wait rather than commit to less. Ceyhan voyages are in the 80,000mt x ws 120- 125 levels, depending on destination, and Black Sea voyages continue to outperform. TCEs here are $20k+, with rates at ws 170 levels. West Med ships are considering ballasting to stronger markets, whilst the Med may recover, yet the going will be tough for Owners. Rates have taken a tumble ex CPC after a light spell in terms of Suezmax enquiry. TD6 has bounced since early week lows of 135,000mt x ws 107.5 nearer to ws 112.5-115 level. Long haul East runs have been the real talking point, with one Charterer getting caught out when Owners duly took advantage of a low counter. Libya/Ningbo has firmed to $3.9-4 million and CPC/South Korea $4.2-4.3 million. We wouldn’t be surprised if the next done levels test downwards with Force Majeure in Libya and a lighter June CPC programme not supporting Owners in the medium term. 

US Gulf/Latin America 

One region where Aframax Owners have been able to reap some healthy rewards due to a decent upturn in enquiry. Availability for early positions commands a decent premium but anything forward will see Med and Cont ballasters competing, which will handcuff levels to a certain extent. Short-haul runs are around 70,000mt x ws 205, with transatlantic holding at around ws 195. VLCC Owners have not had enough cargo enquiry to really hammer home any advantage here just yet; but, with Suezmax and Aframax interest on the up, it looks like it is only a matter of time before we see more Charterers looking to the VLCCs. Last done East is reportedly fixed at $5.35 million and $2.95 million to the Cont. 

North Sea 

A pretty tepid week in the North as Aframax rates bottomed out and then flatlined. The warmer States market has attracted a fair amount of ballasters from both Cont and Med. X-North Sea is trading at 80,000mt x ws 140 levels and Baltic/UKCont is around 100,000mt x ws 165 levels. This looks likely to travel sideways for now.

Clean Products 


Same old in the MR market as volume has remained steady, with the average weekly count of fixtures (29) either fixed or with subjects due.

Not all Owners are singing off the same hymn sheet.

How this sets up for next week is hard to call.

TC5 is untested with only one deal done this week (Platts no floor/ceiling), so expect to see more enquiry on naphtha stems; however, assess TC5 at 55 x ws 270 levels for now.

With public holidays in the UK at the end of next week and with Posidonia the week after, activity levels should pick up, which hopefully will at least give clarity as to where the market sits.

We have lacked a good volume of product in the LR2 segment.


An influx of cargoes on Monday set the tone this week, with Owners on the front foot from the off.

With the fixing window now firmly into the first decade of June, these are unprecedented levels for Summer and expect Owners to dig their heels in and ride this wave of earnings for the foreseeable.

With Handy levels at astronomical heights, this has helped Med MR Owners dig their heels in this week and, although we’ve seen a slight slip in rates from the 37 x ws 345 transatlantic mark on Friday, Owners will be happy with how the week has panned out.

Charterers have to look at the MR size on Handy stems due to elevated freight levels and list, enabling Owners to trade sideways.

Good levels of outstanding enquiry on Friday should see Owners come into work on Monday with a spring in their step.

UK Continent 

You could well have believed this week that negative correction should be on the cards as we saw slower levels of activity paired against a reasonably healthy tonnage list… Yet, Owners with their new belief dug their heels in and managed to repeat 37 x ws 330 for transatlantic for the majority of the week.

However, if Charterers can resist the temptation to jump in on top of each other, the small negative correction could well be seen.

On the flip side, Handies have enjoyed a consistently active week passing in the Continent and saw rates slowly improve throughout.

Off the back of a buzzing Mediterranean market, other Owners have pushed as well.

XUKCont improves to around the 30 x ws 310 mark and likewise, Med runs gain to ws 260ish levels.

Dirty Products 


Handies in the North this week have suffered from a lack of activity across the region, with the sentiment inevitably swinging in Charterers’ favour. Despite replenishment coming on Monday and opportunities presented to Charterers, cargo simply did not flow and by midweek the writing was on the wall for correction. With 10 points shaved off last done and activity still to pick up, there is potential for more to come as itineraries firm over the weekend. All the market can hold on to is the prospect of a short week in London and a push for coverage in early trading in week 23. In the Med, Handies have experienced a slower week but activity levels have been enough to keep the top of the list trimmed, with prompt units being steadily clipped away. Ws 305 has been the level, which has stuck and going forward there is little to suggest sentiment will swing in Owners’ or Charterers’ favour. 


MRs in both the North and Med markets this week have mirrored activity on the Handies and as such there has been little to report. In the Med, availability in the next window is tighter but, with full stems few and far between, MRs have been pushed to jump on part cargoes. With very little natural tonnage pushed this week in the North, there remains the expectation that last done could be tested, however, cargo needs to surface to see just how bullish Owners are willing to be. 


Testing this week showed the market fundamentals to be somewhat out of sync with the pressure being applied by the surrounding sizes above. Delving a little deeper into this statement, if you take a pro rate of an Aframax or a Suezmax (excluding heat) levels, this undercuts a Panamax. Herein lies the problem Charterers face, if you quote a cargo to a Panamax, they will ask “why not use a larger ship”, so there is a bit of gamesmanship going on in this market. One result is clear, however, levels remain firm despite little activity being seen, and are likely to remain this way.

Dirty Tanker Spot Market Developments – Spot Worldscale

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Source: Gibson


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