The tanker market showed a mixed performance in August, OPEC said in its latest monthly report, which was released this week. Dirty tanker freight rates continued to decline across all monitored routes as long tonnage lists and reduced activities weighed on rates.
In the very large crude carriers (VLCC) market, spot freight rates on the Middle East-to-East route declined 12% m-o-m and were down 16% on the Middle East-to-West route. In the Suezmax market, rates on the US to Europe route fell 20%, despite the region seeing slightly more activity. Aframax rates on the Mediterranean-to-Northwest Europe route declined by 20%. Limited activities also prompted increased competition between the various vessel classes, further weighing on rates.
In contrast, clean spot freight rates saw another month of improvements across the board in monthly terms on all monitored routes. East of Suez spot rates rose 13%, while West of Suez rates were up 15% on average. Rates were supported by increased activities toward the end of the month.
Spot fixtures
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Global spot fixtures recovered from the previous month’s decline, averaging 14.6 mb/d in August, a gain of 2.0 mb/d or 16% m-o-m. However, compared with the same month last year, spot fixtures were down 0.7 mb/d or about 5%.
OPEC spot fixtures partly recovered the previous month’s decline, up 0.9 mb/d, or about 10%, to average 9.7 mb/d in August. Compared with the same month in 2022, fixtures were 0.7 mb/d, or 7% lower. Middle East-to-East fixtures were broadly unchanged, edging roughly 1% higher, to average 4.9 mb/d. Compared with the same month in 2022, eastward flows from the Middle East were 1.1 mb/d, or 18% lower. Spot fixtures on the Middle East-to-West route rose m-o-m by 0.5 mb/d, or about 39%, to an average of 1.7 mb/d. Y-o-y, fixtures were up by just over 1%. Fixtures on routes outside the Middle East also picked up after last month’s losses, to average 3.1 mb/d. Fixtures were up 0.4 mb/d, or about 14%, m-o-m, and some 0.3 mb/d, or 11% higher, y-o-y
Sailings and arrivals
OPEC sailings reversed the previous month’s losses to average 22.8 mb/d. This represents a m-o-m increase of 0.6 mb/d or over 2%. However, compared to the same month last year, OPEC sailings were down by 2.2 mb/d or almost 9%. Middle East sailings averaged 17.6 mb/d in August, representing a gain of 0.8 mb/d, or about 5%. Y-o-y, sailings from the region declined by almost 1 mb/d, or around 5%. Crude arrivals in August rose in all regions except West Asia. North American arrivals saw a gain of 0.4 mb/d, or about 4%, to average 9.7 mb/d. Y-o-y, arrivals in North America were 0.4 mb/d, or 4% higher. Arrivals in Europe were marginally higher, averaging 12.9 mb/d. Compared to the same month last year, arrivals to Europe were 0.3 mb/d, or over 2% higher. Far East arrivals averaged 17.3 mb/d, representing a gain of 0.6 mb/d, or about 3%, compared with the previous month. This was around 2.1 mb/d, or close to 14%, higher y-o-y. In contrast, arrivals in West Asia declined 1.0 mb/d, or around 11%, to an average of 8.2 mb/d. Y-o-y, arrivals in the region were 0.1 mb/d, or about 2% lower.
Dirty tanker freight rates
Very large crude carriers
VLCC spot rates fell on all monitored routes, down 9% m-o-m on average, as vessel availability weighed on rates. VLCC rates were 27% lower compared to the same month last year.
On the Middle East-to-East route, rates declined m-o-m by 12% to average WS46 points. This represented a y-o-y decrease of 32%. Rates on the Middle East-to-West route declined 16% m-o-m to average WS31 points. However, compared to the same month last year, rates on the route were up 24%. West Africa-to-East spot rates declined just 2% m-o-m to average WS52 points in August. Compared with the same month of 2022, rates were 26% higher.
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Suezmax
Suezmax rates fell a further 21% m-o-m in August amid limited activities and a build-up in tonnage lists. Compared with the same month of 2022, rates were down 50%. Spot freight rates on the West Africa-to-US Gulf Coast (USGC) route declined by 21% m-o-m in August to average WS64 points, representing a y-o-y decline of 35%. Rates on the USGC-to-Europe route declined 20% m-o-m to average WS59 points. Compared with the same month of 2022, they were 52% lower.
Aframax
Aframax spot freight rates continued to retreat in August, with declines on all routes for the third month in a row. On average, Aframax rates fell 16% in August. Compared with the same month of 2022, rates were down by 54%. Rates on the Indonesia-to-East route dropped just 6% m-o-m to an average WS118 in August. Compared with the same month last year, rates were 48% lower. Spot rates on the Caribbean-to-US East Coast (USEC) route continued to decline from the very strong levels seen in May, down by 18% m-o-m to average WS109 points in August. Y-o-y rates were down by around 64%.
Cross-Med spot freight rates declined by 17% m-o-m to average W100 points. This represented a 50% decline y-o-y. On the Mediterranean-to-Northwest Europe (NWE) route, rates fell 20% m-o-m to average WS88 points. Compared with the same month of 2022, rates were down by around 49%.
Clean tanker freight rates
Clean rates saw an improved performance on all monitored routes. On average, clean spot freight rates were 13% higher m-o-m East of Suez, while rates in the West of Suez market rose 15% over the same period. However, rates were still lower than the previous year’s elevated levels, down by 38% overall.
Rates on the Middle East-to-East route gained 27% m-o-m to average WS154. Y-o-y rates were 43% lower. Clean spot freight rates on the Singapore-to-East route increased 4% m-o-m to average WS177. This was still 48% lower when compared with the same month of 2022. Spot freight rates on the NWE-to-USEC route rose 27% m-o-m to average WS186 points in August but were 36% lower y-o-y. Rates for the Cross-Med route were up 11% m-o-m to average WS191 points, while rates on the Med-to-NWE route increased 10% m-o-m to average WS201 points. Compared with the same month of 2022, rates were lower by 30% and 29%, respectively.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
