Crude tanker markets showed mixed trends as VLCC rates firmed slightly due to tighter tonnage in the West, particularly from Brazil. However, geopolitical tensions between the US and Iran threaten to redistribute tonnage and put downward pressure on rates in the coming week. Suezmax rates in West Africa declined to WS 232.5 amid increased competition and firming Aframax rates in the US Gulf suggest a stable but cautious market.
The LR2s have gone through a week where virtually nothing has taken place. This is very rare indeed; we are mindful of one failure off STS Sohar and one quiet naphtha deal on subs for STS Vadinar. As always, one never assumes one sees the whole picture and some quiet fixing could be happening, but the surface level reporting is where one gets the ‘read’ of the market and this week it reads like horror fiction.
The only potential positive is that ship supply remains balanced. In most other marketplaces over the years where demand dries up like this, that would only go hand-in-hand with a very long position list. However, the fleet has largely been distributed to other corners of the globe, and the Afra segment of course has retained a lot of the tonnage all year, which has only grown further this week, with at least another four CPP ships switching over to the Med DPP trade this week as this market rallied hard and was much more interesting than the CPP alternative.