According to preliminary data, OPEC spot fixtures rose by 0.82 mb/d to stand at
13.21 mb/d in September, following a decline in the previous month. The gain in fixtures
registered this month is mainly driven by the increase in Middle East-to-East fixtures,
which were higher than the previous month by 0.62 mb/d, to stand at 5.99 mb/d.
In contrast, Middle East-to-West fixtures declined by 0.21 mb/d to stand at 2.54 mb/d.
Global fixtures increased by 9% or 1.54 mb/d compared to a month earlier, to stand at
18.82 mb/d. Compared to a year ago, global fixtures were up by 15%.
According to preliminary data, OPEC sailings gained 110 tb/d to stand at 23.81 mb/d in
September, mainly driven by Middle East sailings. Compared to the same month last
year, OPEC sailings were 0.2% lower. Arrivals in Europe and the Far East declined to
average 12.06 mb/d and 8.17 mb/d, respectively, while arrivals at North American ports
and into West Asia were higher.
In September, the weak sentiment continued to dominate both the crude oil and product
tanker markets. The only exception was seen in the VLCC sector, which experienced a
slight gain of 7% compared to the previous month. Suezmax and Aframax lost 20% and
7%, respectively, during the same period. Tonnage surplus and limited tonnage demand
were the main factors preventing the market from reaching its balance. Clean market
rates also experienced a drop, losing 9% on average in September compared to a month
earlier, due mainly to a 16% decline in West of Suez fixtures in August. East of Suez
clean spot freight rates increased mainly on the back of steady shipments to Japan.
September started with a stable amount of fixtures concluded mostly for VLCCs loading
in the Middle East region; however, freight rates did not achieve any gains at that point
despite the resistance to the prevailing freight rates shown by ship owners. September
Middle East loadings registered a marginal increase for eastern and western
destinations despite it being an active month during which total fixtures concluded
higher than usual. It was only at the end of the month that relatively higher freight rates
were registered for VLCCs as the October requirement came along. VLCC spot freight
rates for tankers operating on Middle East-to-East and Middle East-to-West routes
increased by 6% and 13%, respectively, in September, compared to a month earlier.
VLCC spot freight rates for West Africa loading were almost stable despite higher rates
seen in the beginning of the month as tight windows appeared for China discharge. On
a monthly average, spot freight rates for West Africa-to-East increased, yet at a smaller
scale, by 3%, mainly following the increasing trend in the Middle East. All increases in
freight rates remained marginal as the tanker supply situation remains unchanged.
Suezmax freight rates continued to be under pressure in September. Freight rates for
Suezmax in West Africa were no better than VLCC rates in that area, while freight rates
for tankers operating on the West Africa-to-US Gulf Coast (USGC) route dropped by
22% from last month to average 46 WS points, mainly as a result of lower demand on
tonnage in addition to tonnage accumulation in the Atlantic and severe competition from
Indian balasters; all factors together supported the freight rate drop, which was found to
be the lowest in 2013 so far. West Africa’s relatively active market at the beginning of
the month did not prevent freight rates from falling on average. On the other hand,
tanker supply in the Mediterranean and Black Sea remains more than sufficient even for
prompt requirements and freight rates, often reported stable, were at low levels. While
in the west, freight rates in the Northwest Europe (NWE)-to-USGC route declined by
17% to average 45 WS points, expectations of freight rate increases on the back of
storms and bad weather in the US Gulf did not materialise.
Aframax freight rates dropped on all reported routes in September with the exception of
freight rates for vessels operating on the Caribbean-to-US East Coast (USEC) route.
On average, Aframax freight rates were 7% lower than a month ago. The
Mediterranean market witnessed a lack of cargoes and a decline in activity, however
the activity level did increase by the second half of the month, yet remains below what
is needed to alleviate the tonnage built up and to lift the freight rates. Therefore, freight
rates for tankers trading on the Mediterranean-to-Mediterranean route and from the
Mediterranean to Northwest Europe both declined by 13% in September compared to
the previous month to stand at 71 WS points and 66 WS points, respectively, a multimonth
low, which reflects a lack of tonnage demand and inquiry in that area. Freight
rates in the Indonesia-to-East route dropped 5% to average 76 WS points. Activity in
NWE was limited as the market was quiet during different stages of the month, with
freight rates reported stable, at best. The Aframax market in the Caribbean was quiet,
lacking activity and adequate cargo as seen with other routes. However, lighterage
activity helped marginally to increase the monthly freight rate average by 2 WS points
from last month to stand at 106 WS points in September.
Clean tanker market sentiment was mixed in September as East of Suez rates gained
6% while West of Suez edged down by 16%, compared to last month. However, on
average, clean spot freight rates declined by 9% from a month ago and 12% from a
year earlier. In September, the clean tanker market was quiet, the general sentiment
was weak and rates often remained flat.
East of Suez fixtures continued the gain they saw last month with the Middle East-to-
East route registering a 6% increase from a month ago to average 109 WS points.
Additionally, freight rates for tankers operating on the Singapore-to-East route
increased by 5% from August, mainly on the back of steady naphtha shipments. The
higher activity on both routes supported medium-range tanker owners’ demands for
higher freight rates. Westbound fixtures reported a decline on all selected routes as
activity thinned, partially due to holidays in the west and few gasoline shipments from
NWE to the US and the market remains oversupplied with tankers. The US Gulf had an
active market occasionally during the month, however the positive trend flattened
shortly as freight rates declined. Freight rates on the NWE-to-US, Mediterranean-to-
Mediterranean and Mediterranean-to-NWE routes declined by 20%, 16% and 15%,
respectively, in September. The negative trend in tanker demand, which was initially
seen in long-range vessels, spilled over to medium-range vessels as well.