In April, tanker market sentiment weakened in both its dirty and clean sectors. Average spot freight rates
dropped on most reported routes. Dirty tanker freight rates were down 4% from the month before. Despite a
stronger market seen in the VLCC sector marking the only exception in the month as its freights edged up
on all reported routes reversing two consecutive months of declines. VLCC spot freight rates showed
improvements, rising by an average 20% on all reported routes, as a result of enhanced activity in the
market and a tightening in tonnage supply. Nevertheless, average dirty spot freight rates decreased,
influenced by the declines in Suezmax and Aframax freight rates. Suezmax and Aframax both ended the
month down by 8% and 10%, respectively, as tonnage demand for both classes was limited, while tonnage
oversupply was dominant. The clean tanker market showed an average decline in freight rates by 6% from
the previous month on the back of weak sentiment, which prevailed for all East and West of Suez fixtures.
According to preliminary data, global fixtures declined by 0.2% in April compared to the previous month.
OPEC spot fixtures were down by 0.08 mb/d, 0.7%, or, to average 11.63 mb/d. Fixtures on the Middle Eastto-East
route averaged 5.31 mb/d in April, down by 0.05 mb/d from one month ago, while those on the
Middle East-to-West route averaged 2.73 mb/d. Outside the Middle East, fixtures averaged 3.59 mb/d,
showing a decline of 0.11 mb/d. Compared with the same period a year earlier, global fixtures indicated a
drop of 0.8% in April.
Sailings and arrivals
According to preliminary data, OPEC sailings declined by 0.4% in April to average 23.87 mb/d, lower by
1.3% from the same month a year earlier. Middle East sailings also dropped, down by 0.10 mb/d from a
Arrivals were mixed, registering increases in North America and the Far East by 0.2%, each from a month
earlier, while arrivals to Europe and West Asia dropped from the previous month to average 12.55 mb/d and
4.56 mb/d, respectively.
April brought an increase in VLCC activities, which halted the declining trend of the previous month. The
firming rates trend was detected in several markets but mainly in the Middle East and West Africa. The
tonnage carry over from the previous month was at its lowest level since some time. That, combined with
enhanced tonnage demand, has reduced vessel supply and underpinned rate sentiment. Ship owners took
advantage of the tightening vessel supply and pushed for increasingly higher rates. Therefore, VLCC spot
freight rates in April went up for all major trading routes, particularly for first-decade loadings in April, where
Middle East-to-East freight rates rose by 22% and the Middle East-to-West route averaged WS34 points, up
by 24% m-o-m. The VLCC market in the West was active despite the Easter holidays, showing an annual
increase of 21%. West Africa-to-East freight rates followed the same pattern, increasing by 14% to stand at
WS68 points, supported partially by loading requirements from Indian charterers. Towards the end of the
month, VLCC freight rates had a softer feel, as they were mostly corrected down as the activity level thinned
and tonnage availability started to build.
Unlike what was seen in VLCC sector, Suezmax average spot freight rates declined by 8% in April,
reversing all the gains achieved one month earlier, despite an active market at the beginning of the month. In
the Black Sea, freight rates dropped as tonnage availability grew. Average freight rates declined despite of
occasional spike in rates seen as the pre-holiday rush materialised. At that point, higher rates were achieved
in several loading areas mainly covering the first decade requirements of May. The market maintained its
activity following the holidays when spot freight rates moderately strengthened in West Africa, the North Sea
and Baltics, while the Suezmax market in the Caribbean and US Gulf (USG) lacked sufficient activity.
Consequentially, freight rates for tankers on the West Africa-to-US Gulf Coast (USGC) route declined by
12% to average WS77 points, and on the NWE-to-USGC route, freight rates averaged WS66 points, down
by 5% from a month earlier. Freight rates on both routes remained lower by 3% and 4%, respectively, than
during the same months in 2016.
Aframax freight rates exhibited declines on all its reported routes in April. Aframax freight rates in the
Mediterranean showed softer sentiment as tonnage supply appeared to be too large even during delays at
European ports. The lack of activity led to a drop in freight rates by 8% from the previous month, on the
Mediterranean-to-Mediterranean and Mediterranean-to-NWE routes, which averaged WS104 points and
WS98 points, respectively. Despite the general drop in the Mediterranean rates in April, they remain higher
than in the previous year by 20% and 23%, respectively.
In the Caribbean, rates saw another drop, mainly due to a lack of firm inquiries and the tonnage position list
being over populated, while the loading requirements remained limited, thus giving the charters the option to
push for lower rates. Thus, freight rates for Aframax tankers operating on the Caribbean-to-US East Coast
(USEC) declined by 7% from the previous month to average WS103 points. Aframax freight rates in the
East were of no exception, showing a decline from the previous month as spot freight rates registered on
Indonesia-to-East routes declined similar to other routes, dropping by 17% m-o-m, to average WS101 points.
Clean tanker freight rates
In April, although the month started with steady activities for both long-range (LR) 1 and LR2 vessels,
activities soon slowed down and rates started to fall. Clean tanker spot freight mostly dropped with one
exception registered on the NWE-to-US routes where it showed a gain of 6% from a month earlier to stand at
WS175 points. The medium-range (MR) tanker market in the East and West weakened in April as freight
rates declined on several routes.
In the East, the MR market was weak as a result of low activity and thin inquiries in general. Freight rates for
tankers operating on the Middle East-to-East route declined by 15% to average WS107 points. Rates for the
Singapore-to-East route went down by 4% in April compared to the previous month.
The Mediterranean chartering market weakened in April as vessel availability was ample. Thus, the
Mediterranean-to-Mediterranean and Mediterranean-to-NWE clean spot freight rates edged down by 8%
each to stand at WS187 points and WS197 points, respectively