The tanker market improved considerably, during the month of October, OPEC said in its latest monthly report. Very Large Crude Carrier (VLCC) rates continued moving higher in October, with gains seen on all major routes. Spot VLCC rates on the Middle East-to-East route rose 8%, while on the West Africa-to-East route, they gained 10%. Rates for midsize Suezmax and Aframax routes were broadly higher. Suezmax rates on the US Gulf Coast (USGC)-to-Europe route rose 16%, while Aframax spot rates on the Cross-Med route increased by 30%. All monitored routes were well above levels seen in the same month last year. Clean rates saw diverging trends, with losses East of Suez outweighing gains West of Suez. On the Middle East-to-East route, clean spot rates fell 38% m-o-m in October.
The latest estimates show global spot fixtures declined in October to average 13.6 mb/d. Fixtures fell by 1.4 mb/d, or almost 10% m-o-m. Compared with the previous year, spot fixtures were down by 2.2 mb/d or almost 14%. OPEC spot fixtures fell in October, averaging 9.5 mb/d. This represents a m-o-m loss of around 1.3 mb/d, or more than 11%. In comparison with the same month in 2021, fixtures decreased by around 0.4 mb/d, or more than 4%. Middle East-to-East fixtures declined by 0.7 mb/d, or almost 11%, to average 5.9 mb/d. However, compared with the same month last year, eastward flows from the Middle East were still about 0.3 mb/d, or almost 4%, higher. Spot fixtures from the Middle East-to-West fell further in October, down by around 0.2 mb/d, or 15% m-o-m, to average around 1.3 mb/d. Y-o-y, rates were about 5% lower. Outside the Middle East, fixtures averaged 2.3 mb/d. This represents a loss of 12%, or about 0.3 mb/d, m-o-m and a decline of 0.6 mb/d, or almost 21%, y-o-y.
Sailings and arrivals
OPEC sailings fell by around 0.7 mb/d, or around 3%, m-o-m in October to average 23.5 mb/d, but were 1.1 mb/d, or about 5%, higher compared with the same month a year ago. Middle East sailings decreased by around 0.6 mb/d, or more than 3%, in October to average 17.9 mb/d. However, y-o-y, sailings from the region rose by about 1.1 mb/d, or around 7%, compared with October 2021.
Crude arrivals in October were generally higher on most routes, with only the Far East seeing a slight decline m-o-m. Arrivals in North America increased by around 0.6 mb/d, or almost 7% m-o-m, to average 9.6 mb/d and were 0.8 mb/d, or 9%, higher y-o-y. Arrivals in Europe increased by 0.6 mb/d, or over 4%, to average 13.6 mb/d. This was a gain of 1.0 mb/d, or about 8%, compared with the same month last year. West Asia experienced a similar volume gain, up by about 0.6 mb/d, or 7%, to average 8.7 mb/d. Y-o-y, arrivals in the region were up 1.4 mb/d, or about 19%. Meanwhile, arrivals in the Far East fell 0.2 mb/d or about 1% to average 16.7 mb/d, while y-o-y, they were about 3.1 mb/d, or almost 23% higher.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates continued to pick up in October, gaining 8% on average m-o-m. The sector saw support from a return of US crude flows to Asia. Y-o-y, VLCC rates were up 122% on average. On the Middle East-to-East route, rates rose 8% m-o-m to average WS93 points and were 121% higher y-o-y. Rates on the Middle East-to-West route also rose 8% m-o-m to average WS54 points. Y-o-y, rates on the route increased by 125%. West Africa-to-East spot rates gained 10% m-o-m to average WS95 points in October. Compared with the same month last year, rates were 116% higher.
Suezmax rates recovered in October from the slight decline seen the previous month, gaining 17% m-o-m. Rates remained supported by ongoing trade dislocations, which boosted demand for longer-haul voyages in the Suezmax class. Compared with the same month last year, they were considerably higher, up 126%. Rates on the West Africa-to-US Gulf Coast (USGC) gained 17% to average WS149 points. Compared with the same month last year, they were 129% higher. Spot freight rates on the USGC-to-Europe route rose 16% compared with the previous month to average WS131 points. Y-o-y, rates were 122% higher.
Aframax spot freight rates also rebounded on most monitored routes and remained at exceptionally high levels compared with the same month over the last five years. On average, spot Aframax rates increased 15% m-o-m in October. Compared with the same month last year, rates were 111% higher. The only exception to rate gains came from the Indonesia-to-East route, which declined further in October to average WS202 points. Y-o-y, however, rates on the route were up 111%. Spot rates on the Caribbean-to-US East Coast (USEC) route increased by 17% m-o-m to average WS287 points. Y-o-y, they were 121% higher. Mediterranean spot freight rates showed a strong recovery in October. Cross-Med spot freight rates rose 30% m-o-m to average WS228 points. They were 109% higher y-o-y. On the Mediterranean-to-Northwest Europe (NWE) route, rates increased by 37% m-o-m to average WS214 points. Compared with the same month last year, they were around 108% higher
Clean tanker freight rates
Clean spot freight rates continued to experience mixed performance, this time with East of Suez rates contributing to losses, while West of Suez rates saw gains. On average, rates declined by 2% m-o-m in October but were still up 114% compared with levels seen in the same month last year.
Rates on the Middle East-to-East route saw the biggest m-o-m decline, falling 38% in October to average WS188. Y-o-y, rates were up 65%. Freight rates on the Singapore-to-East route also declined m-o-m, down 23% to average WS319; that is still 129% higher than the same month last year. In contrast, the West-of-Suez market improved. Spot freight rates on the NWE-to-USEC route fell 6% m-o-m to average WS274 points. They were 145% higher y-o-y. Rates for the Cross-Med and Med-to-NWE routes rose about 36% each to average WS311 and WS325 points, respectively. Compared with the same month last year, they were 101% and 121% higher, respectively.
Nikos Roussanoglou, Hellenic Shipping News Worldwide