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Tanker Market: December Was a Mixed Bag

The tanker market showed mixed performance during the month of December, according to OPEC’s latest monthly report. Dirty spot freight rates showed diverse movements in the last month of the year, falling on routes to Asia and out of the Middle East, while strengthening in the Atlantic Basin and Mediterranean. On the Middle East-to-East route, VLCC spot freight rates fell 18%, m-o-m, in December, while rates on the West Africa-to-East route dropped by 11%. In the Suezmax market, rates on the US Gulf Coast-to-Europe route partially regained the previous month’s loss, rising 9%, m-o-m. Aframax spot rates experienced increases on all monitored routes, except Indonesia-to-East, which saw a drop of 10%, m-o-m. The Caribbean-to-US East Coast route erased most of the previous month’s sharp loss, with a jump of 42% m-o-m, while Med routes rose by around 15%, m-o-m.

In the clean tanker market, East of Suez rates edged up 1%, m-o-m, on average, while West of Suez rates showed a strong performance, gaining 20%, m-o-m.

Spot fixtures

Global spot fixtures declined m-o-m in December, averaging 12.6 mb/d for the month, representing a drop of 1.3 mb/d, or about 9%, m-o-m. Compared with December 2023, global spot fixtures were down 1.8 mb/d, or 12%. Middle East-to-East fixtures fell by 0.6 mb/d, or 8%, m-o-m, to average 6.3 mb/d. However, y-o-y, fixtures on the route were 0.5 mb/d, or 9%, higher. In December, spot fixtures on the Middle East-to-West route fell 0.2 mb/d, or about 17%, m-o-m, to average 0.9 mb/d. Compared with the same month last year, fixtures were down by less than 0.1 mb/d, or about 5%. Spot fixtures on ‘Outside Middle East’ routes also declined, down 0.3 mb/d, or 11%, m-o-m, to average 2.3 mb/d. Compared with the same month in 2023, fixtures were down by 0.6 mb/d, or 20%.

Sailings and arrivals

Middle East sailings were broadly unchanged in December averaging around 16.4 mb/d. Y-o-y, sailings from the region were 0.2 mb/d, or 1%, higher

Crude arrivals were mixed East and West of Suez, experiencing gains and declines, respectively. Far East arrivals averaged 14.5 mb/d in December, representing a marginal gain of less than 1%. Y-o-y, arrivals were down, however, falling 0.5 mb/d, or about 3%. Arrivals in West Asia saw stronger gains, rising 1.1 mb/d, or 13%, to average 9.5 mb/d. Compared with the same month last year, arrivals in the region were up 1.9 mb/d, or almost 26%.

In contrast, North American arrivals fell 0.3 mb/d, or about 3%, to average 9.6 mb/d. Compared with December 2023, they were 0.4 mb/d, or about 4%, higher. Arrivals to Europe fell by 0.2 mb/d, or less than 2%, m-o-m, to average 11.8 mb/d. Compared with the same month in 2023, they were down 0.5 mb/d, or 3%.

Dirty tanker freight rates

Very large crude carriers (VLCC)

Spot freight rates for VLCCs declined on all monitored routes for the second month in a row in December. On average, VLCC spot freight rates fell by 15%, m-o-m, and declined by 24% compared with the same month in 2023. On the Middle East-to-East route, rates averaged WS42 in December, falling 18% compared to the previous month. Y-o-y, rates were 29% lower. The Middle East-to-West route also registered a loss in December, declining 12%, m-o-m, to average WS29. Compared with the same month in 2023, rates on the route fell by 22%.

Spot freight rates on the West Africa-to-East route also moved lower, dropping 11%, m-o-m, to average WS48 in December. Compared with the same month in 2023, rates were down 19%.

Suezmax

Suezmax spot rates showed an improvement in December, rising by 7%, m-o-m. However, they were still lower by 17%, y-o-y. On the West Africa-to-USGC route, spot freight rates in December averaged WS79, representing an increase of 5%, m-o-m. Spot rates were still 17% lower compared with the same month in 2023. Rates on the USGCto-Europe route showed a larger increase, rising 9% to average WS71. Compared with the same month in 2023, rates were also 17% lower.

Aframax

Aframax spot freight rates showed an improved performance in December after the previous month’s decline. On average, rates were up 14%, m-o-m, while y-o-y spot rates were just 3% lower than in the same month of 2023.

Rates on the Indonesia-to-East route were the only monitored route to register a decline, m-o-m. Rates dropped 10% from the previous month’s levels to an average WS121 in December. Y-o-y, spot rates on the route were down 24%. Spot rates on the Caribbean-to-USEC route jumped 42%, m-o-m, to average WS158 in December, largely erasing the previous month’s decline. Rates were 17% higher than the same month last year. Cross-Med spot freight rates rose 16%, m-o-m, to average WS148. Compared with the same month last year, spot rates on the route were slightly lower, down 2%. Rates on the Med-to-Northwest Europe (NWE) route averaged WS145, representing an increase of 14%, m-o-m. Compared with the same month in 2023, rates were 1% higher.

Clean tanker freight rates

Clean spot freight rates improved, m-o-m, across all monitored routes in December. East of Suez rates rose a marginal 1% on average, while West of Suez rates rose 20%. Compared to the previous year, East of Suez rates were down 27% and West of Suez rates were 28% lower.

Rates on the Middle East-to-East route edged 1% higher, m-o-m, to average WS110 in December. Compared with the same month in 2023, rates were 29% lower. Clean spot freight rates on the Singapore-to-East route also saw a gradual increase, up 2%, m-o-m. Rates on the route averaged WS135, representing a 26% decline compared with the same month in 2023. Rates in the Atlantic basin fared better, with spot freight rates on the NWE-to-USEC route up 21%, m-o-m.

Rates averaged WS131, which represents a drop of 31% compared with December 2023. Rates around the Mediterranean showed similar gains, m-o-m. Rates on the Cross-Med route were up 20%, m-o-m, to average WS189 but were 28% lower, y-o-y. Rates on the Med-to-NWE route increased 19%, m-o-m, but were 27% lower, y-o-y, averaging WS199.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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