According to Weber’s weekly report, an oversupply of VLCC (very large crude carrier) tonnage continued to weigh on the market. VLCC rates are still below the daily operating expenses.
In the Middle East market, 21 VLCC fixtures were recorded in week 11—the week ending March 16, 2018. According to the same report, VLCC rates for the route from the Arabian Gulf to China dropped from $7,766 per day on March 9 to $6,346 per day on March 16. The average rate for all VLCC routes dropped to $8,743 per day on March 16 from $9,190 per day on March 9. The current rates are 60% lower year-over-year. In 4Q17, Euronav (EURN) earned a spot rate of $25,889 per day for its VLCCs. During the same period, DHT Holdings (DHT) earned a spot rate of $19,600 per day for its VLCCs.
According to Weber’s weekly report, the West African Suezmax market was under pressure in week 11. Last week, only eight Suezmax fixtures were reported in this region—a 35% fall week-over-week. Suezmax rates on the route from West Africa to the United Kingdom dropped significantly to $4,464 per day on March 16 from $10,553 per day on March 9, 2018. The average Suezmax rates dropped to $6,418 per day on March 19 from $11,707 per day on March 9, 2018.
Nordic American Tankers (NAT) only has Suezmax vessels in its fleet. For Teekay Tankers (TNK), 50% of its fleet is Suezmax vessels. For Tsakos Energy Navigation (TNP), 43% of its crude tanker fleet is Suezmax vessels.
According to Weber’s weekly report, the rates on the Caribbean route rose to $6,656 per day on March 16 from $5,209 per day on March 9. The average Aframax rates rose to $10,284 per day on March 16 from $9,907 per day on March 9.