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Tanker Market Rose in January

The tanker market rose during the first month of 2024, as a result of disruptions in trade flows, OPEC said in its latest monthly report. Dirty freight rates rose in January amid trade flow disruptions that further increased tonnage mile demand. VLCC spot freight rates on the Middle East-to-West route increased by 24%, m-o-m, while a more modest gain of 5% was seen on the Middle East-to-East route. Suezmax rates on the USGC-to-Europe route increased by 34%, m-o-m, while Aframax rates around the Mediterranean rose by 26%, m-o-m, with gains reflecting tightening availability lists amid trade dislocations. Clean rates saw mixed movement. East-of-Suez rates surged by 45% as trade disruptions triggered some rebooking, while West-of-Suez rates fell by 10%.

Spot fixtures

Global spot fixtures declined sharply in January, dropping 5.1 mb/d, or about 35%, m-o-m, to average 9.5 mb/d. Compared with January 2023, global spot fixtures fell 3.9 mb/d, or 29%. OPEC spot fixtures decreased by almost 3 mb/d, or about 31%, to average 6.8 mb/d in January. Compared with the same month last year, fixtures declined by about 2.1 mb/d, or 24%. Middle East-to-East fixtures dropped 1.7 mb/d, or almost 29%, to average 4.2 mb/d. Compared with the same month in 2023, fixtures on the Middle East-to-East route fell 0.7 mb/d, or about 14%. In contrast, spot fixtures on the Middle East-to-West route fell by 0.4 mb/d, or 43%, m-o-m, to average 0.5 mb/d. Fixtures were down 0.8 mb/d or 59%, y-o-y. Fixtures on routes outside the Middle East declined by 0.9 mb/d, or over 31%, m-o-m, to average 2.0 mb/d. Compared with the same month of 2023, fixtures were 0.7 mb/d, or 25%.

Sailings and arrivals

OPEC sailings increased by 0.8 mb/d, or 4%, m-o-m, to average 19.9 mb/d in January. Compared with the same month in 2023, OPEC sailings were 2.0 mb/d, or 9% lower. Middle East sailings averaged 16.4 mb/d in January, representing an increase of 0.2 mb/d, or over 1%, m-o-m. Y-o-y, sailings from the region were 0.5 mb/d, or about 3%, lower. Crude arrivals rose in all destinations except North America. North American arrivals fell by 0.5 mb/d, or about 5%, to average just under 9 mb/d. Compared with January 2023, North American arrivals were 0.5 mb/d, or about 5%, lower. In contrast, arrivals in Europe increased by about 0.1 mb/d, or about 1%, to average 12.3 mb/d.

Compared with the same month of 2023, arrivals to Europe rose by 0.1 mb/d, or less than 1%, in January. Far East arrivals rose 1.0 mb/d, or about 6%, m-o-m, to average 17.5 mb/d. Y-o-y, arrivals in the region were up 2.0 mb/d or over 13%. Arrivals in West Asia averaged 9.2 mb/d, representing an increase of 0.7 mb/d or almost 9%. Y-o-y, arrivals in the region were 0.6 mb/d, or about 13%, higher.

Dirty tanker freight rates

Very large crude carriers

VLCC spot rates recovered in January on all monitored routes, with the Middle East-to-West route leading gains. On average, VLCC spot freight rates rose 12%, m-o-m. Compared with the same month of 2023, VLCC rates were 24% higher.

Rates on the Middle East-to-West route increased 24%, m-o-m, to average WS62 points. Compared with the same month of 2023, rates on the route were 27% higher. On the Middle East-to-East route, rates rose by a more moderate 5%, m-o-m, to average WS46 points. This represents a y-o-y increase of 18%. West Africa-to-East spot rates were up 10%, m-o-m, to average WS65 points in January. Compared with the same month of 2023, rates were up 27%.

Suezmax

Suezmax spot freight rates recovered most of the previous month’s losses in January, increasing 33%, m-o-m. They were 19% higher than in the same month of 2023. On the West Africa-to-USGC route, spot freight rates increased 32%, m-o-m, in January to average WS125 points. Compared with the same month of 2023, spot rates gained 7%. Rates on the USGC-to-Europe route rose 34%, m-o-m, to average WS115 points. Compared with the same month of 2023, they were 35% higher.

Aframax

Aframax spot freight rates rebounded in January. On average, rates rose 38%, m-o-m, but were still 2% lower than in the same month of the previous year. Rates on the Indonesia-to-East route saw a modest gain of 6%, m-o-m, to average WS169 points in January. Compared with the same month of 2023, rates were 32% lower.

Spot rates on the Caribbean-to-US East Coast (USEC) route surged 108%, m-o-m, to average WS281 points in January. Compared with the same month of 2023, rates were up 85%.

Cross-Med spot freight rates increased 26%, m-o-m, to average WS190 points. This represents a 14% decline, y-o-y. Meanwhile, rates on the Mediterranean-to-Northwest Europe (NWE) route increased 21%, m-o-m, to average WS173 points. Compared with the same month of 2023, rates declined 18%.

Clean tanker freight rates

Clean spot freight rates saw a bifurcated market in January. Clean spot freight rates East of Suez jumped 45%, m-o-m, while rates in the West-of-Suez market declined 10%. As a result, clean spot rates averaged 7% higher overall. The re-routing of some tankers around the Cape of Good Hope left the East of Suez temporarily short of vessels, driving up rates.

Rates on the Middle East-to-East route jumped 58%, m-o-m, to average WS244 points. Compared with the same month in 2023, rates were up 16%. Clean spot freight rates on the Singapore-to-East route increased 34%, m-o-m, to also average WS244 points. This was 11% higher than in the same month of 2023. In contrast, spot freight rates on the NWE-to-USEC route declined 7%, m-o-m, to average WS176 points.

This represents a 4% drop compared with January 2023. Rates for the Cross-Med route fell 12%, m-o-m, to average WS231 points, and rates on the Med-to-NWE route showed a similar loss, down 12%, m-o-m, to average WS241 points. However, compared with the same month of 2023, rates were up around 13% on both routes.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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