Tanker Market Steadies During March

The tanker market has steadied during the month of March, OPEC said in its latest monthly report. Dirty freight rates were relatively steady in March on most monitored routes. VLCC spot freight rates on the Middle East-to-East route were unchanged, m-o-m, although they declined 20% compared to the same month last year. Middle East-to-West rates declined 10% and were down 19%, y-o-y. Suezmax spot freight rates fell 4%, m-o-m, in the Atlantic Basin but were down by more than 20%, y-o-y. Aframax rates saw mixed movement, up 6%, m-o-m, in the Indonesia-to-East route, but with an outsized drop of 19%, m-o-m, on the Caribbean to US East Coast route. The clean market experienced mixed movement in March, with East of Suez spot freight rates declining 8%, m-o-m, while West of Suez rates rose 10%, m-o-m, supported by gains in the Mediterranean route.

Spot fixtures

Global spot fixtures fell sharply in March, erasing the previous month’s gains. Fixtures were down 4.0 mb/d, or about 27%, m-o-m, to average 11.0 mb/d. Compared with March 2023, global spot fixtures declined by 2.9 mb/d, or over 26%. OPEC spot fixtures averaged 8.1 mb/d in March, representing a drop of 2.2 mb/d, or 21%. Compared with the same month last year, fixtures declined by about 2.9 mb/d, or 27%. Middle East-to-East fixtures declined 0.6 mb/d, or over 10%, to average 4.9 mb/d. Compared with the same month in 2023, fixtures on the Middle East-to-East route fell by 1.5 mb/d, or about 23%. Spot fixtures on the Middle East-to-West route declined by 0.8 mb/d, or about 46%, m-o-m, to average 0.9 mb/d. Fixtures were down 0.4 mb/d or 29%, y-o-y. Fixtures on routes outside the Middle East also fell 0.8 mb/d, or nearly 27%, m-o-m, to average 2.3 mb/d. Compared with the same month of 2023, fixtures were 1.1 mb/d, or 33%, lower.

Sailings and arrivals

OPEC sailings declined 0.4 mb/d, or about 2%, m-o-m, to average 20.8 mb/d in March. Compared with the same month in 2023, OPEC sailings were 1.9 mb/d, or over 8% lower. Middle East sailings averaged 17 mb/d in March, representing an increase of 0.9 mb/d, or about 5%, m-o-m. Y-o-y sailings from the region declined by 0.5 mb/d or about 3%. Crude arrivals rose in all monitored regions. North American arrivals increased by 0.4 mb/d, or about 5%, to average 9.0 mb/d. Compared with March 2023, North American arrivals were 0.1 mb/d, or about 2%, lower. Arrivals to Europe increased by about 1.3 mb/d, or nearly 11%, to average 13.1 mb/d. Compared with the same month of 2023, arrivals to Europe were 1.9 mb/d, or 17%, higher. Far East arrivals rose by 1.4 mb/d, or about 9%, m-o-m, to average 17.0 mb/d in March. Y-o-y arrivals in the region were up by 3.2 mb/d, or nearly 23%. Arrivals in West Asia averaged 9.0 mb/d, representing an increase of 0.7 mb/d or 8% in March. Y-o-y arrivals in the region were 0.5 mb/d, or 6%, higher.

Dirty tanker freight rates

Very large crude carriers

VLCC spot rates were mixed in March. On average, VLCC spot freight rates declined 3%, m-o-m. Compared with the same month of 2023, VLCC rates declined 19%. On the Middle East-to-East route, rates were unchanged m-o-m, averaging WS70 points. This represents a y-o-y decline of 20%. In contrast, rates on the Middle East-to-West route fell 10%, m-o-m, to average WS47 points in March. Compared with the same month of 2023, rates on the route declined by 19%. West Africa-to-East spot rates edged up 1%, m-o-m, to average WS71 points in March. Compared with the same month of 2023, rates were 17% lower.

Suezmax

Suezmax spot freight rates declined further in March, down 4%, m-o-m. They were 25% lower than in the same month of 2023. On the West Africa-to-USGC route, spot freight rates declined by 4%, m-o-m, in March to average WS99 points. Compared with the same month of 2023, spot rates fell 23%. Rates on the USGC-to-Europe route fell 4%, m-o-m, to average WS88 points. Compared with the same month of 2023, they were 27% lower.

Aframax

Aframax spot freight rates saw mixed movement in March. On average, rates fell by 5%, m-o-m, and they were 33% lower than in the same month of the previous year. Rates on the Indonesia-to-East route rose 6%, m-o-m, to average WS167 points in March. Compared with the same month of 2023, rates were 11% lower. Spot rates on the Caribbean-to-US East Coast (USEC) continued to decline, dropping 19%, m-o-m, to average WS154 points in March. Rates were down 55% compared with the same month of 2023.

Cross-Med spot freight rates decreased by 4%, m-o-m, to average WS159 points. This represents a 28% y-o-y decline. In contrast, rates on the Mediterranean-to-Northwest Europe (NWE) route rose 2%, m-o-m, to average WS157 points. Compared with the same month of 2023, rates declined by 22%.

Clean tanker freight rates

Clean spot freight rates experienced mixed movement, with East of Suez rates down 8%, m-o-m, and Westof-Suez rates increasing by 10%. As a result, clean spot rates averaged just 2% higher overall.

Rates on the Middle East-to-East route fell 7%, m-o-m, to average WS246 points in March. Compared with the same month in 2023, rates were up 29%. Clean spot freight rates on the Singapore-to-East route declined 10%, m-o-m, to average WS280 points.

This was 50% higher than in the same month of 2023. Spot freight rates on the NWE-to-USEC route declined 6%, m-o-m, to average WS207 points. This represents a 10% decrease compared with March 2023. Rates around the Mediterranean fared better, with the Cross-Med up 16%, m-o-m, to average WS324 points, and rates on the Med-to-NWE route gained 15%, m-o-m, to average WS334 points. When compared with the same month of 2023, rates were up 1% on both routes.
Nikos Roussanoglou, Hellenic Shipping News Worldwide