Tanker Market Showed Mixed Movement During June

The tanker market was mixed during the month of June, according to the latest monthly report from OPEC. Dirty freight rates continued to show mixed movement in June. VLCCs partially recovered from the previous month’s decline, with Middle East-to-East spot freight rates up 27% m-o-m, amid increased flows to the East. A pickup in Atlantic basin activity and firm eastward sentiment in the larger vessel class, supported rates. Suezmax rates returned some of the previous month’s gains, with rates on the USGC-to-Europe route declining 20%, amid more limited activity.

Aframax spot freight rates fell across the board in June, with rates on the Caribbean-to-US East Coast (USEC) route falling back from the very strong levels seen in May, down by 34%. Clean freight rates experienced declines across all reported routes, as West of Suez rates remained soft and momentum in the East of Suez market dissipated further. Rates on the Middle East-to-East route declined m-o-m by 16% in June, while rates on the Singapore-to-East route fell 23%.

Spot fixtures

Latest estimates show global spot fixtures rebounding in June to average 15.1 mb/d. Fixtures rose m-o-m by 1.4 mb/d, or over 10%, with gains seen on all monitored routes, the exception being the Middle East-toWest. Compared with the previous year, spot fixtures rose 1.9 mb/d or 14%.

OPEC spot fixtures increased by 1.9 mb/d, or more than 20%, to an average of 11.2 mb/d in June. Compared with the same month in 2022, fixtures were 2.1 mb/d, or about 23% higher. Middle East-to-East fixtures increased by 1.6 mb/d, or over 35%, to average 6.3 mb/d.

Compared with the same month in 2022, eastward flows from the Middle East were 1.2 mb/d, or almost 25%, higher. Spot fixtures on the Middle East-to-West route declined m-o-m, down by about 3%, to an average of 1.2 mb/d. Y-o-y, fixtures were down by 0.2 mb/d, or almost 17%. Fixtures on routes outside the Middle East showed further gains, up 8%, or 0.3 mb/d m-o-m, to average almost 3.8 mb/d. Compared to the same month last year, fixtures on the route rose 1.1 mb/d or around 41%.

Sailings and arrivals

OPEC sailings declined in June to an average of 22.4 mb/d. This represents a m-o-m drop of about 0.9 mb/d or 4%. Y-o-y, OPEC sailings were down marginally. Middle East sailings averaged 17.5 mb/d in June, representing an increase of 0.3 mb/d, or about 2%. Y-o-y, sailings from the region increased by 0.3 mb/d, or close to 2%.

Crude arrivals in June rose on all monitored routes, except West Asia. North American arrivals saw a gain of 0.3 mb/d, or about 4%, to average 9.4 mb/d. Y-o-y, arrivals in North America were 0.3 mb/d, or 4%, higher. Arrivals in Europe increased by 0.7 mb/d, or about 6% m-o-m, to an average of 12.9 mb/d. Compared to the same month last year, however, arrivals to Europe were 0.8 mb/d, or over 6% lower. Far East arrivals averaged 18.2 mb/d, representing a gain of 0.9 mb/d, or over 5%, compared with the previous month. This was around 4.2 mb/d, or about 30%, higher y-o-y. In contrast, arrivals in West Asia fell by 0.6 mb/d, or almost 7%, to an average of 8.5 mb/d. Y-o-y, arrivals in the region were up by 0.3 mb/d, or approaching 4%.

Dirty tanker freight rates

Very large crude carriers (VLCCs)

VLCC spot rates partially recovered from the previous month’s decline, gaining 23% compared to May. VLCC rates were also up 35% on average compared to the same month last year. A pickup in Atlantic basin activity and firm eastward sentiment in the larger vessel class, supported prices. On the Middle East-to-East route, rates rose m-o-m by 27% to average WS61 points. This represented a y-o-y increase of 33%. Rates on the Middle East-to-West route increased 14% m-o-m to average WS41 points. Y-o-y, rates on the route were up 52%. West Africa-to-East spot rates gained 22% m-o-m to average WS60 points in June. Compared with the same month of 2022, rates were 25% higher.

Suezmax

Suezmax rates in June returned some of the previous month’s gains, declining 10% m-o-m. Compared with the same month of 2022, rates were down 2%. Spot freight rates on the West Africa-to-USGC route were flat m-o-m in June, remaining at WS106 points. Y-o-y, rates were 4% higher. Rates on the USGC-to-Europe route declined 20% to average WS83 points. Compared with the same month of 2022, they were 9% lower.

Aframax

Aframax spot freight rates declined across the board in June. On average, Aframax rates declined 19% across the month. Compared with the same month of 2022, rates were down by 11%. Rates on the Indonesia-to-East route dropped 5% m-o-m to an average WS146 in June. Compared with the same month last year, rates were 16% lower. Spot rates on the Caribbean-to-USEC route fell back from the very strong levels seen in May, down by 34% to average WS169 points. Y-o-y, rates were down by around 2%.

Cross-Med spot freight rates declined by 19% m-o-m to average W145 points. This represented a 14% gain y-o-y. On the Mediterranean-to-Northwest Europe (NWE) route, rates fell a further 10% m-o-m to average WS141 points. Compared with the same month of 2022, rates were down by around 11%

Clean tanker freight rates

Clean spot freight rates experienced declines across all reported routes, as momentum in the East of Suez market dissipated further. On average, rates fell 12% m-o-m and were down 63% compared with June 2022 levels.

Rates on the Middle East-to-East route declined by 16% m-o-m to average WS142. Y-o-y, rates were 54% lower. Clean spot freight rates on the Singapore-to-East route fell 23% m-o-m to average WS181. This was down 56% compared with the same month of 2022. Spot freight rates on the NWE-to-USEC route declined by 4% m-o-m to average WS146 points in June and were 59% lower y-o-y. Rates for the Cross-Med route fell by 3% to average WS140 points, while rates on the Med-to-NWE route were also down by 3% to average WS150 points. Compared with the same month of 2023, rates were lower by 70% and 69%, respectively.
Nikos Roussanoglou, Hellenic Shipping News Worldwide