Global fixtures increased by 15.6% in January, compared with the previous month. OPEC spot fixtures were up by 1.7 mb/d, or 16%, and averaged 12.4 mb/d, according to preliminary data. The gain in OPEC fixtures received support outside the Middle East. Fixtures from the Middle East averaged 12.4 mb/d in January, while, from outside that region, they averaged 4.2 mb/d, an increase of 1.3 mb/d. Compared with the same period a year earlier, global fixtures indicated growth of 16% in January. Preliminary data showed that OPEC sailings remained flat in January, averaging 23.3 mb/d. However, compared with the same month last year, they gained 0.4 mb/d, or 2%. January arrivals in all areas, except the Far East, gained ground over last month. North America and West Asia increased by 20 tb/d and 11 tb/d respectively, to average 8.8 mb/d and 4.6 mb/d.
Europe remained flat, while the Far East declined by 13 tb/d. Both dirty and clean tanker spot freight rates were bearish in January, compared with the previous month. The decline in dirty rates was experienced on all reported routes, except for VLCCs from West Africa to the US. In the clean market, rates on all reported routes declined both East and West of Suez. In the dirty tanker segment, VLCC spot freight rates declined by 4.4%, Suezmax rates retreated by 1.2% and Aframax rates decreased by 20.2%. In the clean tanker segment, East of Suez rates dropped by 19% and West of Suez declined by 12%. The decline in spot freight rates in January came mainly from the increase in Worldscale evaluations, which, at a rough average, rose by 18% on reported routes. However, compared with last year, average spot freight rates in nominal terms for both dirty and clean tankers showed improvements in January this year.
Spot freight rates for VLCCs operating from the Middle East to eastern destinations and from the Middle East to western ports declined by 5% in January, compared with the previous month. The drop in rates on both routes was driven mainly by the increase in the Worldscale flat rate on the back of higher bunker prices. Additionally, moderate Chinese tonnage demand, as many charterers went on holiday during the Chinese New Year, put further pressure on the decline in rates. Tonnage demand improvements from other Asian countries did not support rates closing higher from Middle East loading ports in January. Following a similar trend, rates for VLCCs operating on the long-haul route from West Africa to eastern destinations declined by 3% in January. Changing trade routes, where vessels load from the Middle East to the US and return laden from West Africa to the East, increased availability and put pressure on rates. Compared with the same month a year earlier, rates from the Middle East to the East, the Middle East to the West, and West Africa to the East showed increases of 19%, 16% and 16% respectively in January.
Suezmax spot freight rate developments in January followed the same pattern as VLCC rates, as average rates dropped by 1.2%, compared with the previous month. However, the rate for Suezmax operating on the West Africa-to-the-US route increased by 3%, the only spot rate that achieved an increase in January on all the reported routes. The rate for tanker sailings from NW Europe to the US decreased by 5%. The gain in West Africa-to-the-West was supported by ample tonnage demand and owner sentiment towards increasing February requirements from the US, while the loss in NW Europe-to-the-US came from pressure from limited transatlantic activity and plentiful tonnage in the Mediterranean.
Aframax spot freight rates experienced the biggest declines in January, compared with the previous month. The average rate fell by 20% on the reported routes. East of Suez, the rate on the Indonesia-to-the-East route declined by 14%. West of Suez, the Caribbean-to-the-US rate remained flat, while the Mediterranean-to-Mediterranean and Mediterranean-to-NW Europe rates declined by 32% and 31% respectively; these declines were driven by a build-up in tonnage supply and a reduction in delays in the Turkish Straits, as weather conditions improved. The increase in the Worldscale flat rate was the main reason for the steady state of rates for Aframax operating in the Caribbean in January, with support from increased activity and weather conditions. The decline in Indonesia-to-the-East rate came on the back of flat rate changes, as well as lower requirements from Japan.
In the clean tanker market, spot freight rates weakened on all reported routes in January, after the rebound on many routes in the previous month, due partially to the flat rate increase. The average rates decreased by 19% East of Suez and by 13% West of Suez. The biggest decline was on the Singapore-to-the-East route, where the rate dropped by 20%. The rate for the Middle East-to-the-East route declined by 17%. The decline in the Singapore–to-the-East rates was driven by lower product trade. The decline on the Middle East-to-the-East route came on the back of lower naphtha trade, as Asian petrochemical plants reduced their requirements.
West of Suez clean tanker spot freight rates followed the same pattern as East of Suez. Rates on all reported routes declined in January, compared with last month. The NW Europe to-the-US rate witnessed the heaviest decline of 17%. The rate for tankers operating on the Caribbean-to-the-US route declined by 14%, while those for the Mediterranean-to Mediterranean and the Mediterranean-to-NW Europe dropped by 11% and 10% respectively. Adequate tonnage supply and the flat rate increase put pressure on the rate in NW Europe-to the-US, while improved weather conditions, as well as lower requirements from Latin America, had a negative impact on the Caribbean-to-the-US clean rates. The small open transatlantic arbitrage of gasoline and diesel provided some support for spot freight rates and limited the declines in January. The new Worldscale flat rate exerted downward pressure on spot freight rates both East and West of Suez and left clean tanker rates weak. Compared with the same month last year, East of Suez rates declined in January, while those of West of Suez increased.