uploads/2018/01/Spot-Rates_Week-1-1.jpg

Crude Tanker Rates: 2018 Hasn’t Started on a Good Note

By

Updated

VLCC rates

According to Weber’s report for week 1 of 2018, VLCC (very large crude carrier) rates continued to sour due to the rising level of surplus availability in the Middle East market. Demand continues to be dull.

The surplus VLCCs in the Middle East at the end of January is projected to be 29—the highest level since September 2017. According to Weber’s report, in week 2 (week ending January 5, 2017) VLCC rates will continue to fall.

Article continues below advertisement

According to Weber’s week 1 report, VLCC rates for the route from the Arabian Gulf to China fell to $12,460 per day on January 5, 2018, from $13,812 per day on December 29, 2017. The average rate for all VLCC routes fell to $13,123 per day on January 5, 2018, from $14,603 per day on December 29, 2017. The current rates are 72% lower year-over-year. DHT Holdings (DHT) and Euronav (EURN) mainly operate VLCCs.

Suezmax rates

According to Weber’s weekly report, Suezmax demand in the West African market fell for the third consecutive week. According to the report, the Suezmax rates on the route from West Africa to the United Kingdom fell from $13,850 per day on December 29, 2017, to $5,152 per day on January 5, 2018. The average rate for all Suezmax vessels fell to $7,816 per day on January 5 from $14,603 per day the previous week.

Nordic American Tankers (NAT), Teekay Tankers (TNK), and Tsakos Energy Navigation (TNP) have Suezmax vessels in their fleets.

Aframax rates

The Aframax rates on the Caribbean route fell to $15,225 per day on January 5, 2018, from $16,691 per day on December 29. The average rate for all of the Aframax routes fell to $8,234 per day from $11,705 per day.

Advertisement

More From Market Realist