Fearnleys Weekly - Tankers

Chartering - Crude

There are preciously few changes to the VLCC market the last week. I.e. volumes stable, but far from sufficient to change the oversupply of tonnage, for all the major VLCC routes. Options for owners are few and far between and boils down to accept earnings down towards to zero USD/day or simply elect not engage at all. Either option hardly edible nor sustainable over time. In the meantime, resilience and simply patience will be put to serious tests. It was an improved week in the Suezmax market with decent volume in Wafr clearing out ships for the early 3rd decade, rates have seemingly peaked at ws70 for Ukcm discharge with earnings back at just over USD 10,000/day. The Bsea also saw moderate improvement on the back of the Wafr momentum with TD6 breaking through the ws75 barrier although current market is now showing signs of a slightly softer tone. Eastern ballasters have had plenty of choice of cargoes in the MEG with an active Kharg programme keeping the list ticking over. The week ahead has a more steady/soft feel as end 3rd decade Wafr dates are coming to an end. Rates in the Nsea and Baltic moved sideways from last week, but could easily move further as soon as 3rd decade cargoes gets into play. Ice delays on its own is still not sufficient to make this market move, so owners really need to make a final stand if we will have any significant ice premium this season. In the Med and Bsea we are scraping the bottom and the tce’s usually end up in red unless you use your optimist-calculator. The cargo activity has been decent, but it’s the amount of available tonnage that have pushed rates down to an unbearable level. At the time of writing, the tonnage list is looking healthier as charterers have gone out and secured cheap rates for their cargoes. However, we now expect some quiet days before we yet again have to man ourselves up and fight for higher numbers.

Chartering - Product

EAST OF SUEZ Since our last report, from the Middle East Gulf the LR1s have been trading mostly flat at ws115 for Far East discharge. On the other hand, the LR2s have had a much more exciting week and owners have been able to demand higher rates, and they have increased with ws15 points to ws120 level today. For west discharge the current lumpsum rate for LR2s are at about USD 1.7 mill whilst the LR1s are being paid close to USD 1.3 mill. After weeks in the doldrums, MRs have this week shown strength and rates have move from ws122.5 to ws135 today. Owners in the Far East have also had a good week with improved rates. The short haul voyage from South Korea to Japan has moved from USD 300,000 to USD 365,000 and the straight MR voyage from Singapore to Japan has added ws5 points this week to ws140 level. WEST OF SUEZ Also a little bit mixed in the west this week. The straight Continent to States voyage has dropped about ws15 points to ws140 level this week, but the backhaul voyage from the US Gulf has gained ws10 points to ws120 level. This means daily earnings for owners triangulating are more or less unchanged from last week at around USD 16,250. LR1s trading to west Africa have been able to marginally move rates upwards ws5 points. After weeks of declining rates, and on the back of increased rates in the Middle East Gulf, LR2s have seen the freight from Mediterranean to Far East move from USD 1.475 mill to USD 1.6 mill level today. Handies trading on the Continent have seen rates slide for several weeks after the peak of ws220 mid-February to ws155 today. In the Mediterranean, the market is still flat and ws150 level is going level.

Activity level

VLCC Suezmax Aframax P.E. of Suez P.W. of Suez
Stable Stable Mixed Moderate Moderate


DIRTY (Spot WS) This week Last week Low 2018 High 2018
MEG / West VLCC 16.00 17.50 16.00 23.50
MEG / Japan VLCC 35.00 37.50 35.00 50.00
MEG / Singapore VLCC 35.50 38.00 35.50 51.00
WAF / FEAST 260,000 37.50 40.00 37.50 48.50
WAF / USAC 130,000 67.50 52.50 50.00 67.50
Sidi Kerir / W Me 135,000 65.00 57.50 55.00 67.50
N. Afr / Euromed 80,000 80.00 95.00 80.00 110.00
UK / Cont 80,000 100.00 100.00 90.00 107.50
Caribs / USG 70,000 90.00 107.50 80.00 132.50
MEG / Japan 75,000 120.00 105.00 80.00 120.00
MEG / Japan 55,000 115.00 115.00 90.00 115.00
MEG / Japan 30,000 135.00 122.50 110.00 135.00
Singapore / Japan 30,000 140.00 135.00 130.00 145.00
Baltic T/A 60,000 110.00 105.00 100.00 145.00
UKC-Med / States 37,000 140.00 155.00 135.00 165.00
USG / UKC-Med 38,000 120.00 110.00 80.00 135.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 23,500.00 23,500.00 23,500.00 27,500.00
Suezmax (modern) 16,500.00 16,500.00 16,500.00 17,000.00
Aframax (modern) 13,500.00 13,500.00 13,500.00 15,000.00
LR2 105,000 14,250.00 14,250.00 14,250.00 15,000.00
LR1 80,000 13,750.00 13,750.00 13,750.00 13,750.00
MR 47,000 13,750.00 13,750.00 13,750.00 14,000.00
VLCCs fixed all areas last week: 45 previous week: 59
VLCCs avail. in MEG next 30 days: 133 last week: 136

Sales and purchases

Vessel Size Built Buyer Price Comm.
Mistral 306 278 2000 Undisclosed 20,5
Pacific Rainbow 45 986 2008 Greek 16,25