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Tanker Market on the Rise

The tanker market has been on the rise during the month of October, according to OPEC’s latest monthly report. Dirty freight rates began to recover in October as refiners started preparing for winter demand following maintenance in 3Q23. Gains were concentrated in the smaller class vessels. Suezmax rates jumped to a five-month high during the month, with rates on the US Gulf Coast-to-Europe route increasing by 98%, m-o-m. Aframax rates also saw a significant increase, with rates around the Mediterranean up 74%, m-o-m.

In contrast, VLCC spot freight rates saw a more moderate increase, with rates on the Middle East-to-East route up 26%, m-o-m, amid increased long-haul activity. Meanwhile, clean rates saw slightly mixed movement. East of Suez rates were almost flat m-o-m, supported by an increase on the Middle East-to-East route, which rose 6%, m-o-m. West of Suez rates fell 19%, m-o-m, as margins weakened in the Atlantic basin amid high inventories of key products.

Spot fixtures

Global spot fixtures increased in October, up 0.2 mb/d, or almost 2%, m-o-m, to average 15.1 mb/d. Compared with the same month last year, spot fixtures were 0.4 mb/d or 3% higher. OPEC spot fixtures declined 0.4 mb/d, or over 3%, to average 10.6 mb/d in October. Compared with the same month in 2022, fixtures were 0.4 mb/d, or 4% lower.

Middle East-to-East fixtures edged up by less than 1% to average 6.1 mb/d. Compared with the same month in 2022, eastward flows from the Middle East were broadly flat. In contrast, spot fixtures on the Middle East-to-West fell by about 4%, m-o-m, to an average of 1.4 mb/d. Fixtures were broadly in line with year-ago levels.

Fixtures on routes outside the Middle East fell by 0.4 mb/d, or just over around 10%, m-o-m, to average 3.1 mb/d. Compared with the same month last year, fixtures were 0.4 mb/d, or 16% higher.

Sailings and arrivals

OPEC sailings rose 0.5 mb/d or 2%, m-o-m, to average 23.6 mb/d in October. However, compared to the same month last year, OPEC sailings were down by 1.7 mb/d, or over 6%. Middle East sailings averaged 16.4 mb/d in October, representing a decline of 0.2 mb/d, or about 1%. Y-o-y, sailings from the region were 1.4 mb/d, or 8% lower. Crude arrivals in October fell in all regions.

North American arrivals fell by 0.3 mb/d, or about 3%, to average 8.8 mb/d. Y-o-y, arrivals in North America were also down 0.3 mb/d, or 3%. Arrivals in Europe declined 0.2 mb/d, or about 2%, to average 12.4 mb/d. Compared to the same month last year, arrivals to Europe registered a similar decline of 0.2 mb/d, or about 2%. Far East arrivals also declined by about 0.2 mb/d, or almost 2%, m-o-m, to average 12.8 mb/d. Y-o-y, arrivals in the region were 2.5 mb/d or 16% lower. Arrivals in West Asia decreased by 0.2 mb/d, or around 3%, to an average of 6.9 mb/d. Y-o-y, arrivals in the region were 1.7 mb/d, or almost 20% lower.

Dirty tanker freight rates

Very large crude carriers

VLCC spot rates rose on all monitored routes, increasing 24%, m-o-m, on average, amid a pickup in longer haul demand. However, compared to the same month last year, VLCC rates were 41% lower. On the Middle East-to-East route, rates gained 26%, m-o-m, to average WS53 points. This represented a y-o-y decline of 43%. Rates on the Middle East-to-West route gained 19%, m-o-m, to average WS32 points. Compared to the same month last year, rates on the route fell 41%. West Africa-to-East spot rates increased 19%, m-o-m, to average WS56 points in October. Compared with the same month of 2022, rates were down 41%.

Suezmax

Suezmax rates experienced the strongest m-o-m gains compared to the other vessel classes. Spot rates rose 76%, m-o-m, but were still 27% lower than the elevated levels seen in the same month last year. On the West Africa-to-US Gulf Coast (USGC) route, spot freight rates rose 58%, m-o-m, in October to average WS106 points. However, rates were still 29% lower, y-o-y. Rates on the USGC-to-Europe route jumped 98%, m-o-m, to average WS99 points. Compared with the same month of 2022, they were 24% lower.

Aframax

Aframax spot freight rates also performed strongly in October. On average, Aframax rates increased 68% in October. Compared with the same month of 2022, rates were 27% lower. Rates on the Indonesia-to-East route increased 24%, m-o-m, to average WS156 points in October. However, compared with the same month last year, rates were 23% lower.
Spot rates on the Caribbean-to-US East Coast (USEC) route saw the strongest m-o-m gain in the monitored Aframax routes, surging by 126%, m-o-m, to average WS192 points in October. However, y-o-y rates were still down by 33%.

Cross-Med spot freight rates increased 74%, m-o-m, to average WS171 points. This represented a 25% decline, y-o-y. Meanwhile, rates on the Mediterranean-to-Northwest Europe (NWE) route rose 71%, m-o-m, to average WS162 points. Compared with the same month of 2022, rates were down by around 24%.

Clean tanker freight rates

Clean rates saw declines on all monitored routes except on the Middle East-to-East. On average, clean spot freight rates on East of Suez routes slipped 1% lower, m-o-m, while rates in the West of Suez market fell 19% over the same period. As a result, rates averaged 13% lower overall.

Rates on the Middle East-to-East route edged up 6%, m-o-m, to average WS165 points. However, compared to the same month last year, rates were 12% lower. Clean spot freight rates on the Singapore-to-East route declined 5%, m-o-m, to average WS217 points. This was 32% lower when compared with the same month of 2022. The NWE-to-USEC route declined 11%, m-o-m, to average WS163 points. This represents a 41% decline compared to October 2022. Rates for the Cross-Med route decreased by 23%, m-o-m, to average WS191 points, while rates on the Medto-NWE route dropped by 22%, m-o-m, to average WS201 points. Compared with the same month of 2022, rates fell by around 38% on both routes.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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