Dirty tanker market sentiment weakened in August, as average spot freight rates declined on most reported
routes. On average, dirty tanker freight rates were down by 4% from the month before. Earnings for dirty
tankers reached the lowest level seen since the beginning of the year. Among other factors, the drop in dirty
spot freight rates was influenced by high vessel availability, as new deliveries were reportedly added to the
fleet, putting pressure on the already oversupplied tonnage market.
Average clean tanker spot freight rates also developed negatively in August despite enhanced rates
registered in East of Suez. In the West of Suez, Medium-range (MR) tanker freight rates almost doubled in
the US following Hurricane Harvey. However, the gains were shortly lived as the market found its balance.
Average MR tanker freight rates declined on all reported routes in the West with no exception. Generally,
the clean tanker market was quiet in August, showing no significant demand.
Global fixtures rose by 1.1% in August, compared with the previous month. OPEC spot fixtures declined by
0.37 mb/d, or 3%, averaging 11.86 mb/d, according to preliminary data. The drop in fixtures was registered
mainly in the East. Fixtures on Middle East-to-East destinations were lower, as were fixtures outside of the
Middle East, which averaged 3.87 mb/d in August, down by 0.19 mb/d from one month earlier. Compared
with the same period a year earlier, all fixtures were higher in August.
Sailings and arrivals
Preliminary data showed that OPEC sailings declined by 0.5% in August, averaging 24 mb/d, though
remaining 0.32 mb/d, or 1.4%, higher than the same month a year before.
Arrivals in Europe were up from the previous month, while in the Far East, West Asia and North America,
arrivals declined by 0.01 mb/d, 0.04 mb/d and 0.43 mb/d, respectively, to average 8.82 mb/d, 4.64 mb/d and
Following the typical trend in the summer months, VLCCs lacked tonnage demand in general, which
prolonged the tonnage list and thus kept spot freight rates under constant pressure as they had been in
previous months. VLCC spot fright rates were softer in August on several routes as competition between
ship owners put further pressure on rates and prevented them from achieving any gains, even during days of
relatively enhanced activity.
In August, VLCC daily earnings dropped to the lowest level this year so far and low freight rates discouraged
ship owners from getting involved in longer-haul voyages. Thus, VLCC freight rates on key trading routes
Middle East-to-East and Middle East-to-West fell, with spot freight rates decreasing by 18% and 6%,
respectively, from the previous month to stand at WS42 and WS24 points. Similarly, spot freight rates on the
West Africa-to-East route declined by 10% to average WS49 points.
Suezmax was the only class in the dirty tanker segment which showed a rate increase from the previous
month as a result of higher volumes of fixtures to eastern destinations, which led to tighter ship availability.
Suezmax freight rates saw minor gains on average in August, despite new deliveries adding to the already
oversupplied tonnage market. Freight rates for tankers operating on the West Africa-to-USGC route
remained unchanged from the previous month to average WS61 points. Similarly in the West, freight rates
on the Northwest Europe (NWE)-to-USGC route stood at WS55 points.
Aframax spot freight rates declined across all reported routes in August, suffering from the same general
negative trend dominating the tanker market during the summer months when markets in several regions
remained depressed despite weather delays and some replacements and the market remained under the
influence of slow activity and a prolonged tonnage list. As a result, freight rates for tankers trading on both
the Mediterranean-to-Mediterranean and Mediterranean-to-NWE routes declined by 7% each to stand at
WS78 and WS72 points in August, respectively, compared with the previous month.
The Aframax market in the Caribbean was generally quiet and lacking cargoes, as was seen with other
routes. Average Aframax freight rates dropped in August, despite an increase in rates which were driven by
operation disruption following the Harvey Hurricane in the US. Average monthly freight rates for tankers
operating on the Caribbean-to-US East Coast (USEC) route rose by 10% over the previous month to
average WS100 points. In contrast, average freight rates for tankers trading on the Indonesia-to-East route
dropped by 3% to average WS84 points.
Clean tanker freight rates
Clean tanker market sentiment mostly came under pressure in August despite a strengthening trend in the
East of Suez, nevertheless weak rates in the West of Suez drove average clean tanker rates down by 1%.
The clean tanker market was quiet and sentiment stayed weak. Rates often remained flat, despite firmer
sentiment in the East of Suez, which was initially detected for LR ships for which freight rates edged up on
several trading routes before MR vessels followed suit.
MR tanker rates registered on the Middle East-to-East route showed an increase of 12% from a month ago
to average WS127 points.
Rates for tankers operating on the Singapore-to-East route increased by 5% from July to WS155 points.
In the West of Suez, rates have been experiencing a downward trend in different classes. Spot freight rates
were mostly flat on the back of ample tonnage supply. Freight rates on the NWE-to-USEC remained
marginally unchanged. Temporary MR freight rates more than doubled as affected by the hurricane in the
US, however the escalating trend faded quickly as rates went down showing no effect on the freight rates
monthly average. Sport freight rates registered for tankers trading on the Mediterranean-to-Mediterranean
and Mediterranean-to-NWE routes declined by 11% each, to stand at WS118 points and WS127 points