Dirty tanker market sentiment was generally weaker in June, as average spot freight rates dropped on all
reported routes. On average, dirty tanker freight rates declined by 17% from the previous month and spot
rates for all classes went down. These negative developments came as the market suffered from limited
activity prior to the summer months, while the increase in vessel supply remained a main influence on
freight rate movements.
Clean spot freight rates had a mixed performance, with some routes showing higher freight rates; however,
these were relatively minor. On average, clean tanker spot freight rates were almost flat compared with
those of the previous month.
Preliminary data for June shows that OPEC spot fixtures went up by 5.6%, compared with the previous
month, to average 13.18 mb/d. Global spot fixtures rose as well by 1.9%, to average 18.03 mb/d. Fixtures on
the Middle East-to-East route were up by 12% and on the Middle East-to-West routes by 7%. In general,
global chartering activities were higher than the same month a year ago on all reported destinations.
Sailings and arrivals
OPEC sailings rose by 0.2 mb/d, or 0.8%, in June from the previous month, reflecting a gain of 1.7% from
the year before. Middle East sailings rose from the previous month by 0.31 mb/d and from the previous
year by 0.42 mb/d. According to preliminary data, arrivals at the main importing regions in North American
and Far Eastern ports showed an increase from a month earlier, rising by 8.5%, and 2.1%, respectively.
Vessel arrivals in West Asian and European ports declined from the previous month by 3.8% and 4.9%,
Dirty tanker freight rates
VLCC freight rates weakened in June despite an active start to the month, with enhanced freight rates in
both Middle East and West Africa chartering markets, although the gains remained limited. VLCC markets
weakened thereafter despite some steady mid-month activity. Market activity was insufficient to support any
rate increase as the tonnage supply remained abundant even allowing the main monthly chartering
requirements. As a result, spot freight rates declined in several regions, showing monthly and annual drops.
VLCC spot freight rates for tankers trading on the Middle East-to-East routes dropped by 7%, to stand at
WS51 points. Middle East-to-West freight rates followed the same pattern, though reflecting a higher drop of
10%, to stand at WS26 points. Freight rates for tankers operating on the West Africa-to-East route were also
lower, showing a decline of 3% from the previous month.
As was the case with the bigger vessels, Suezmax spot freight rates also experienced negative
developments in June. Spot freight rates edged down as the Suezmax market suffered from high vessels
supply versus limited requirements. Suezmax rates hit year lows, as prompt vessel availability reached its
highest level as a result of new deliveries and low operational delays. Low returns were exhibited on many
voyages which took profitability to a very low end. In West Africa, spot freight rates for tankers operating on
the West Africa-to-US Gulf Coast (USGC) route dropped by 21% to stand at WS60 points. Spot freight rates
for tankers operating on the Northwest Europe (NWE)-to-USGC route dropped by 18% to average
WS57 points. Suezmax rates on both routes showed a greater decline compared with freight rates registered
on the same routes the previous year by 17% and 7%, respectively.
As was the case with other vessel sizes in the dirty tanker segment, Aframax freight rates dropped in June
from the previous month, showing an average 19% decline m-o-m. The Aframax freight rates decline came
as a result of drops experienced on all reported routes. The downward pressure affected voyage profitability.
Freight rates for tankers operating on the Mediterranean-to-Mediterranean and Mediterranean-to-NWE
routes went down by 21% and 24% to average WS91 and WS85 points, respectively, as a result of
increased availability, even for spot requirements. Aframax rates in the Mediterranean turned flat in many
cases as they suffered from limited enquiries.
Spot freight rates went down on the Caribbean-to-US East Coast (USEC) route by 25% from the previous
month as no rush of activity was detected prior to the holidays. Additionally, the market in the Caribbean did
not benefit from storm and weather disruptions. Aframax freight rates to eastern destinations were not an
exception, dropping by 4% for tankers trading on the Indonesia-to-East route to average WS93 points.
Clean tanker freight rates
Clean tanker market sentiment continued to be weak in June. On average, clean spot tanker freight rates
were almost flat from the previous month and stood at WS134 points. Average spot freight rates dropped
despite some enhancement detected on certain routes, although these enhancements were relatively minor.
The clean tanker market had an uneventful June with mostly flat rates in different regions. Long and mediumrange
markets lacked activity and no improvements in rates were seen even during the days of relative tight
In the West of Suez, freight rates experienced some decline on average as they were affected by the freight
rate drops in the Mediterranean, where rates registered on both Mediterranean-to-Mediterranean and
Mediterranean-to-NWE routes dropped by 6% each.
Freight rates for medium-range vessels in the East reflected minor changes from the previous month where
rates remained primarily unchanged before improving at end of the month, with higher vessel demand led by
steady fixing. Thus, freight rates for tankers operating on the Middle East-to-East route remained primarily
unchanged to average WS107 points. Rates for the Singapore-to-East route rose by 2% in June compared
with the previous month and they averaged WS138 points.
Clean tankers freight rates in both the eastern and western direction of Suez were higher than those of the
same month a year before.