Tanker Market Improved in September

The tanker market showed improved performance during the month of September, according to OPEC’s latest monthly report. Dirty spot freight rates for VLCCs and Suezmax witnessed an improved performance in September, while Aframax rates moved lower. VLCC spot freight rates on the Middle East-to-East route rose 6%, m-o-m, while rates on the West Africato-East route gained 3% over the same period. In the Suezmax market, rates on the US Gulf Coast (USGC)-to-Europe route edged up 2%, m-o-m. Aframax rates on the Caribbean-to-US East Cost (USEC) route dropped 16%, m-o-m, while the rates on the cross-Med route fell by 12%. Despite the mixed m-o-m performance, rates for all classes were higher compared to the same month last year. In the clean market, spot freight rates declined m-o-m on all monitored routes, except for Middle East-toEast, which rose 10%, m-o-m.

Spot fixtures

Global spot fixtures improved further m-o-m in September, the exception being ‘Outside Middle East’ where fixtures fell. Global fixtures averaged 14.4 mb/d for the month, representing an increase of 0.7 mb/d, or about 5%, m-o-m. Compared with September 2023, global spot fixtures were down by 0.3 mb/d, or 2%. OPEC spot fixtures averaged 9.9 mb/d in September, representing an increase of 0.6 mb/d, or around 7%, m-o-m. Compared with the same month last year, fixtures were down by 1.0 mb/d, or about 9%. Middle East-to-East fixtures rose by 0.6 mb/d, or almost 11%, m-o-m, to average 6.4 mb/d. Y-o-y, fixtures on the Middle East-to-East route were 0.4 mb/d, or 6%, higher. Spot fixtures on the Middle East-to-West route gained 0.2 mb/d, or 21%, m-o-m, to average 1.3 mb/d. Compared with the same month last year, fixtures were down 0.1 mb/d, or almost 6%, y-o-y. In contrast to other routes, spot fixtures on ‘Outside Middle East’ routes declined, falling by 0.2 mb/d, or 10%, m-o-m, to average 2.2 mb/d. Compared with the same month in 2023, fixtures were down by 1.3 mb/d, or 37%.

Sailings and arrivals

OPEC sailings were broadly flat in September, averaging 21.1 mb/d. Compared with the same month in 2023, however, OPEC sailings were up 2.4 mb/d, or almost 13%. Middle East sailings were negligibly higher, m-o-m, averaging 16.5 mb/d in September. Y-o-y, sailings from the region were down by 0.4 mb/d, or almost 3%.

Crude arrivals showed mixed movements. North American arrivals fell by about 0.4 mb/d, or about 4%, to average 9.7 mb/d. Compared with September 2023, they were 0.2 mb/d higher, or about 3%. In contrast, arrivals to Europe increased by about 0.4 mb/d, or almost 3%, m-o-m, to average 12.8 mb/d. Compared with the same month in 2023, they were 1.1 mb/d, or 9%, higher. Far East arrivals averaged 15.8 mb/d in September, representing a gain of 2.2 mb/d, or almost 17%. Y-o-y, arrivals in the region were 1.2 mb/d, or over 8%, higher. Arrivals in West Asia were negligibly lower m-o-m in September, averaging 8.9 mb/d. Compared with the same month last year, however, arrivals in the region still showed an increase of 1.8 mb/d, or 25%.

Dirty tanker freight rates

Very large crude carriers (VLCC)

Spot freight rates for VLCCs improved further in September, after having been stagnant the month before. On average, VLCC spot freight rates rose by 4%, m-o-m, and they were 26% higher compared with the same month in 2023.

On the Middle East-to-East route, rates averaged WS53 in September, up 6% compared to the previous month. Y-o-y, rates were up 26%. The Middle East-to-West route also showed gains in September, rising 3%, m-o-m, to average WS34. Compared with the same month in 2023, rates on the route were also 26% higher. Spot freight rates on the West Africa-to-East route rose 4%, m-o-m, to average WS57 in September. Compared with the same month in 2023, rates were up 21%.

Suezmax

Suezmax spot rates picked up slightly, by 1%, m-o-m, after a strong decline in August. Y-o-y, rates were up 19%. On the West Africa-to-USGC route, spot freight rates in September averaged WS74, representing a small gain of 1%, m-o-m. Spot rates were up by a stronger 10% compared with the same month in 2023. Rates on the USGC-to-Europe route rose 2%, m-o-m, to average WS64. Compared with the same month in 2023, they were 28% higher.

Aframax

In contrast to the larger classes, Aframax spot freight rates experienced declines on all monitored routes for the second month in a row. On average, Aframax rates fell 10%, m-o-m, although rates were still 10% higher compared to the same month last year. Rates on the Indonesia-to-East route fell 4%, m-o-m, to average WS136 in September. This still represents a gain of 8% compared to the same month last year.

Spot rates on the Caribbean-to-US USEC route experienced the sharpest decline for the second consecutive month, dropping 16%, m-o-m, to average WS93 in September. Nonetheless, rates remained 9% higher compared with the same month in 2023. Cross-Med spot freight rates fell 12%, m-o-m, to average WS111. Compared with the same month last year, spot rates on the route were 13% higher. Rates on the Med-to-Northwest Europe (NWE) route averaged WS106, representing a decline of 12%, m-o-m. Compared with the same month in 2023, rates were up 12%.

Clean tanker freight rates

Clean spot freight rates saw mixed movements in September, as a strong performance on the Middle East-toEast route boosted East of Suez rates while all other monitored routes experienced declines. Consequently, East of Suez rates rose 3%, while West of Suez rates fell 22%. Clean freight rates remained below last year’s elevated levels, with East of Suez rates down 22%, y-o-y, and West of Suez rates 47% lower than the same month in 2023.

Rates on the Middle East-to-East route rose 10%, m-o-m, to average WS151 in September. Compared with the same month in 2023, rates were still 3% lower. Clean spot freight rates on the Singapore-to-East route dropped 3%, m-o-m. Rates on the route averaged WS147, representing a 36% decline compared with the same month in 2023. Spot freight rates on the NWE-to-USEC route fell 17%, m-o-m. Rates averaged WS120, which represents a 34% drop compared with September 2023.

Rates around the Mediterranean continued to decline, both in m-o-m and y-o-y terms. Rates on the CrossMed route lost 23%, m-o-m, to average WS118 and were down 52%, y-o-y. Rates on the Med-to-NWE route fell 22%, m-o-m, and were down by 50%, y-o-y, to average WS128.

Nikos Roussanoglou, Hellenic Shipping News Worldwide