Dirty freight rates showed mixed movement in September, OPEC said in its latest monthly report. Despite some strength seen in the second half of the month, VLCCs spot freight rates continued the decline from the peak seen in June. Rates on the Middle East to West route led to declines, falling 13%.
Suezmax and Aframax spot freight rates also showed a mixed performance. Suezmax rates on the US Gulf Coast to Europe route declined 15%, while rates on West Africa to US Gulf Coast route rose 5% amid a pickup in tanker demand. In the Aframax market, rates on the Caribbean to US East Coast route experienced a strong seasonal decline of 22%, while rates on the Mediterranean-to-Northwest Europe route rose 8% on temporary tightness in the market mid-month.
Clean spot freight rates saw strength around the Mediterranean as non-Russian tonnage remained tight. Rates also strengthened in the Far East as activity in the regional product market began to pick up. In contrast, rates on the Northwest Europe to US route dipped with the end of the driving season.
Spot fixtures
Global spot fixtures continued to build on the previous month’s gains, averaging 13.6 mb/d in September, a gain of 0.6 mb/d, or 4%, m-o-m. However, compared with the same month last year, spot fixtures were down 1.6 mb/d, or over 10%. OPEC spot fixtures partly recovered the previous month’s decline, up 1.5 mb/d, or about 17%, to average 10.1 mb/d in September. Gains were attributed to higher flows out of West Africa. Compared with the same month in 2022, fixtures were 0.7 mb/d, or 6% lower.
Middle East-to-East fixtures increased from the low levels seen the month before, up 1.3 mb/d, or almost 30%, to average 5.8 mb/d. However, compared with the same month in 2022, eastward flows from the Middle East were still 0.8 mb/d, or 12% lower.
Spot fixtures on the Middle East-to-West route declined m-o-m by 0.4 mb/d, or about 26%, to an average of 1.1 mb/d. Y-o-y, fixtures saw a similar increase, up 0.4 mb/d, or almost 27%. Fixtures on routes outside the Middle East picked up after last month’s losses, to average 3.2 mb/d. Fixtures were up 0.6 mb/d, or about 22%, m-o-m, and around 0.6 mb/d, or 21% higher, y-o-y.
Sailings and arrivals
OPEC sailings edged slightly higher, averaging 22.1 mb/d. This represents a m-o-m increase of 0.1 mb/d, or less than 1%. However, compared to the same month last year, OPEC sailings were down by 2.4 mb/d or almost 10%. Middle East sailings averaged 14.6 mb/d in September, representing a decline of 2.4 mb/d, or over 14%. Y-o-y, sailings from the region were 4.5 mb/d, or almost 24% lower.
Crude arrivals in September rose in all regions except Europe. Arrivals in Europe fell 0.5 mb/d, or about 4%, to average 12.1 mb/d. Compared to the same month last year, arrivals to Europe declined 0.9 mb/d, or over 7%. In contrast, North American arrivals saw a gain of 0.2 mb/d, or about 2%, to average 9.8 mb/d. Y-o-y, arrivals in North America were 0.8 mb/d, or 9%, higher.
Far East arrivals were broadly flat m-o-m at 17.0 mb/d. This was around 0.1 mb/d, or less than 1% higher, y-o-y. Arrivals in West Asia rose 0.4 mb/d, or around 5%, to an average of 8.4 mb/d. Y-o-y, arrivals in the region were 0.2 mb/d, or about 3% lower.
Dirty tanker freight rates
Very large crude carriers
VLCC spot rates fell on all monitored routes, down 10% m-o-m on average, as easing tanker demand weighed on rates in September. VLCC rates were 49% lower compared to the same month last year. On the Middle East-to-East route, rates declined m-o-m by 9% to average WS42 points. This represented a y-o-y decline of 51%. Rates on the Middle East-to-West route declined 13% m-o-m to average WS27 points. Compared to the same month last year, rates on the route fell 46%. West Africa-to-East spot rates dropped 10% m-o-m to average WS47 points in September. Compared with the same month of 2022, rates were down 45%.
Suezmax
Suezmax rates were lower on average amid mixed performance in September. Spot rates fell 5% m-o-m and were down 52% y-o-y. On the West Africa-to-US Gulf Coast (USGC) route, spot freight rates rose 5% m-o-m in September to average WS67 points. However, rates were still 47% lower y-o-y. In contrast, rates on the USGC-to-Europe route dropped 15% m-o-m to average WS50 points. Compared with the same month of 2022, they were 56% lower.
Aframax
Aframax spot freight rates also experienced a decelerating decline in September. On average, Aframax rates were down 2% in September. Compared with the same month of 2022, rates were 50% lower. Rates on the Indonesia-to-East route increased 7% m-o-m to average WS126 points in September. However, compared with the same month last year, rates were 44% lower.
Spot rates on the Caribbean-to-US East Coast (USEC) route saw the strongest m-o-m decline in the monitored Aframax class, down by 22% m-o-m to average WS85 points in September. Y-o-y rates were down by around 65%.
Cross-Med spot freight rates declined 2% m-o-m to average WS98 points. This represented a 44% decline y-o-y. In contrast, rates on the Mediterranean-to-Northwest Europe (NWE) route rose 8% m-o-m to average WS95 points. Compared with the same month of 2022, rates were down by around 39%.
Nikos Roussanoglou, Hellenic Shipping News Worldwide