In November, tanker spot freight rates for dirty vessels showed a noteworthy
rise, as average spot freight rates continued to increase for the third month in a
row, showing a gain of 24% on average from the previous month. Freight rates
for all classes in the dirty segment of the market increased on almost all reported
routes, though the amount of gains varied. Rates for VLCC fixtures in November
continued to rise as seen in the previous month, supported by steady tonnage
demand in major trading areas where different routes reflected higher freight
rates. The Suezmax class also benefited from a firming market, though its
increase in rates remained marginal. Aframax freight rates showed the highest
increase in dirty class vessels, mainly as demand and rates in the Mediterranean
surged, in combination with increased delays at Turkish straits, which reduced
the supply of vessels and raised freight rates significantly in a monthly and on
an annual basis.
In November, OPEC spot fixtures were down by 1% from the previous month to
average 11.10 mb/d, according to preliminary data. The drop came at the same time as
lesser spot fixtures from the Middle East-to-West and outside Middle East fixtures
declined – by 5.9% and 19.6%, respectively – from a month before. Meanwhile, fixtures
from the Middle East-to-East rose by 0.7 mb/d in November to average 6 mb/d.
Sailings and arrivals
OPEC sailings increased by 0.25 mb/d, or 1.1%, in November to stand at 24.01 mb/d,
This was supported by an increase in Middle East sailings, which rose by 0.23 mb/d, or
1.3%, over the previous month to average 17.35 mb/d. Crude oil arrivals were higher in
most regions in November. Arrivals at North American, Far Eastern and European
ports rose by 1.9%, 7.5% and 1.7%%, respectively, compared with the previous month.
Arrivals in West Asian ports were the only exception, as they dropped by 9.5%.
Spot freight rates
In the dirty market, VLCC spot freight rates continued to climb as seen in the previous
month. In November, VLCC average spot freight rates increased by 11% from one
month before. The tonnage market was mostly balanced in November, despite activity
fluctuating, which led to a slower pace of activities, mainly as November requirements
were covered. On average, VLCC spot freight rates stood at WS59 points, up by 3%
from those registered in the same month a year earlier. VLCC Middle East-to-East spot
freight rates went up by 14% in November to stand at WS69 points, followed by freight
rates registered for tankers trading on the Middle East-to-West route, which rose by
10% to average WS39 points. As for the tanker market in West Africa, the VLCC spot
freight rate on the West Africa-to-US Gulf Coast route showed fewer gains than other
routes, though it remains up by 9% m-o-m to average WS73 points.
Average Suezmax spot freight rates also showed gains in the dirty market, though at a
lower level than in the VLCC sector, rising by only 2% on average in November,
compared with the previous month, to average WS68 points. The month started with a
quiet market in several areas with limited fixtures, while vessel supply remained
sufficient and rates stayed weak. Later on, an increased flow of fixtures in the
Caribbean, USGC and Europe supported Suezmax demand in many areas, reducing
tonnage availability and thus boosting the tonnage sentiment. Suezmax freight rates in
November were also supported by rising rates of Aframax and delays in the Turkish
Straits, which partially drove the rates in the Black Sea higher.
Consequently, spot freight rates for tankers operating on the West Africa-to-US route
increased by 9% in November to stand at WS73 points, while rates on the Northwest
Europe(NWE)-to-US route showed a decline by 4% to stand at WS64 points.
Average Aframax spot freight rates showed the highest gains in dirty tanker sector, as
increases were seen in all reported routes. Average Aframax spot freight rates showed
remarkable gains in November, averaging WS119 points. In the Baltics and North Sea,
Aframax rates experienced a sudden increase at the beginning of the month as the
tonnage list tightened notably. The rising sentiment for this class spread to the
neighboring areas of the Mediterranean and Black Sea tonnage market. A high level of
fixtures and inquiries kept freight rates up despite a high level of volatility in different
markets. The surge in rates seen in different markets was also supported by tonnage
demand for Mediterranean loadings, which, coupled with increasing delays at the
Turkish Straits and a prolonged total transit time, supported the massive increase in
spot freight rates. On the other hand, the announcement of the Primorsk loading
programme in December was another factor which maintained higher rates for Aframax
Consequently, spot freight rates on the Mediterranean-to-Mediterranean and
Mediterranean-to-NWE Europe routes were the main contributors to the average rate
increase. Both routes reflected higher rates by 89% and 88%, respectively, from the
previous month to stand at WS134 points and WS127 points. This reflects an increase
of 19% and 18% from the same month in 2015. Spot freight rates for Aframax
operating on the Caribbean-to-US route registered relatively lower increases, rising by
30% from last month to recover to WS126 points. Meanwhile, spot freight rates for
tankers trading on the Indonesia-to-East routes showed a relatively lower gain, rising
by 7% to stand at WS88 points.
Clean spot freight rates
Within the clean tanker market, spot freight rates took different directions in November.
Nevertheless, on average, clean freight rates went up by 11% compared with the
previous month. The higher average freight rates were driven by higher rates achieved
in western markets, while in eastern markets, market activity remained limited.
Spot freight rates for tankers operating on the Middle East-to-East route dropped by
WS9 points from the previous month. Similarly, freight rates on the Singapore-to-East
route declined by WS8 points from one month earlier to average WS104 points in
On the West-of-Suez route, rates experienced different gains as the tonnage demand
in different markets varied. However, an occasional tightening of ships drove freight
rates higher. Clean spot freight rates on the Mediterranean-to-Mediterranean and
Mediterranean-to-NWE routes went up by 18% and 20%, respectively, in November.
Rates for tankers trading on NWE-to-US East Coast averaged WS110 points, rising by
36% from a month before.