Aging Fleet

The tanker fleet is aging. The last couple of years have seen few deliveries and little scrapping as a strong market and a growing dark fleet has kept many vessels from being beached. Second-hand asset values surged in the years following Russia’s invasion of Ukraine, as especially older vessels have found ready buyers in the dark fleet and sanctioned markets with prices far exceeding scrap values. With 51% of the total tanker fleet of 25,000 dwt and above aged 15 years and older and 22% above the age of 20, it begs the question of how aging has impacted fleet utilisation. Part of the answer lies in dark and sanctioned fleet activity, with 93% of the dark fleet aged 15 and over, and 64% aged 20 years and older.

Vessels aged over 20 years old spend on average 17% more time in absolute terms anchored or moored across size classes compared to those under 20 years old. The strongest difference was seen in VLCCs, with a 32% increase in days spent moored or anchored. In terms of their laden status, vessels aged over 20 years old spend on average 14% more time ballasting in absolute numbers compared to vessels under 20. The strongest difference here was seen in MRs, which saw an increase of 22% in time spent ballasting. Predictably, tanker utilisation thus decreases with age. Vessel utilization changes further if the ship in question is sanctioned, though this differs across size classes. Sanctioned VLCCs over 20 years old are moored or anchored around 67% of the time, and 38% of the time laden with cargo, compared with 59% and 39% for unsanctioned vessels over the age of 20 respectively, indicating lower levels of trading. On the other hand, sanctioned Handies regardless of age, spent more time laden than unsanctioned Handies under 20 years old. The sanctioned fleet has grown significantly so far this year, and the data indicate that sanctioned vessels have in 2025 so far spent a greater share of their time moored or anchored than in 2024.

Assessing these statistics is fraught with difficulties, as already regular gaps in AIS data multiply beyond the age of 20, especially in the case of possible dark activity. Notably, sanctioned vessels across age classes share AIS data more frequently than unsanctioned vessels over the age of 20. Vessels over the age of 20 have less diverse trading patterns and spend more time trading East of Suez than vessels under 20. Hotspots for older vessels can be found off the coast of Singapore (both transiting the Malacca Strait and EOPL), China, and Venezuela, as well as in the AG, in line with our understanding of dark and sanctioned fleet trading patterns. Sanctioned vessels also regularly try to “spoof” their AIS position to appear to be undertaking legal activity.

Next year will see a reprieve in aging, as many of the vessels ordered during the boom of the last couple of years will hit the water. Beyond that the outlook is more uncertain, though barring significantly more ordering or changes in scrapping dynamics the fleet will keep aging. As vessels age, their utilisation decreases, which should be a tailwind for freight rates in years to come. Another consideration is the increased risk of accidents and environmental disasters that an aging fleet poses. We have seen a few incidents over the last couple of years involving dark fleet vessels, though so far large spills and the additional scrutiny they may bring have largely been avoided. It may be that more frequent accidents are a matter of time if current aging trends persist.

The big question mark is the dark fleet, as any normalisation of relations between Russia, Venezuela, Iran and the West could go hand in hand with a wave of scrapping as older vessels find they are unable to return to the conventional market. The outlook here is difficult to predict and depends on many factors, though the older the vessels are the less likely they are to return to the market if relations normalise. On the other hand, if sanctions are intensified, we could see scrapping delayed further with more vessels joining the dark fleet. In this scenario the fleet will likely keep aging rapidly.

AIS Status of Vessels aged 20+ (%)

Crude Oil

East

Overall, a positive week for VLCC owners as we witnessed a good level of enquiry for early June combined with a few end of May stems to cover. Owners’ sentiment has firmed, and they are aiming to push rates even higher as increases in OPEC production gives optimism that the market could see a better than expected summer. The bullishness has been enhanced by reports of charterers paying well above last done for early June but a few of these fixtures were denied. We expect a further uptick next week once the UAE stems are confirmed over the weekend. Today we are calling AG/China WS63 and AG/USG WS32.

The Suezmax enquiry from this region has picked up a little more than what we have seen of late, but cherry-picking tonnage carefully in the region for select stems has been wise resulting in competitive levels. As we close this week fixing levels 140 x WS50 via C/C is what we expect a Basrah/Med run to pay, transit via Suez we expect to pay around the WS90 level. Rates to go East have remained stable as well around the 130 x WS105 region, despite some downwards pressure from a few units.

In Asia, Aframax demand continued to be drip fed as the fixing window now moves into end-May. Vitol and Ampol are the only ones out there to test rates for north and Australia bound runs amid an ample supply of prompt vessel availability. Regional activity was almost obsolete for the Indo region this week as charterers will look to beat last done levels, again. Activity ex-Oz ticked up for early June and with the CPP market picking up steam, Aframaxes should be in contention for those barrels given the spread between the two sectors. Overall sentiment remains soft for the region, and we assess Indo/Oz at 80 x WS112.5.

West Africa

VLCC activity in WAF has picked up this week and it appears that rates are finally improving albeit at a slower pace than AG. Charterers are now looking at forward positions and trying to take advantage of the increasing number of east ballasters but owners are showing resistance as they see improvements in the AG and want to get similar returns. The one negative has been the lack of activity from USG so they tonnage list may prove to be a hindrance to attempts at pushing rates higher.  We are calling WAF/East in the region of WS63 today.

For Suezmaxes, Monday kicked off with what could be said to be a long tonnage list for the Atlantic basin, however with fixing levels already looking like they had bottomed we did start to question that. Steady enquiry from the West Africa and US markets has managed to trim the tonnage down steadily through the week. This managed to pretty much hold last done levels but in fact at the time of writing TD20 looks to have gained a couple of points around the WS 87.5 level. Expect more of the same in early trading next week.

Mediterranean

For Suezmaxes here in the Med, as early June dates came into play from CPC this week, we have seen a few charterers cover their stems. However, even with the upturn in enquiry fixing levels have remained flat with the conference level of 135 x WS110 for MED discharge well established now. We expect come Monday tonnage will be replenished in the Mediterranean for the next round of enquiry. However, these may be a little date sensitive as lots of the early units have been cleared down.

For Mediterranean Aframaxes the week began with charterers asking themselves how much more they could push rates down after the last few fixtures did not fully test the ground. A sorely lacking Libya 20-25 window (due to own program tonnage absorbing much of the cargo length) gave proceedings a softer feel. By the middle of the week Libya tested down into WS120s with even short unattractive voyages dipping into this range. By the close a new low of WS117.5 was achieved for a more well sought after Ceyhan run and this number was repeated, as the market finally finds a floor. The list has now been trimmed somewhat but owners will need replacements or a healthy 1-5 XMed window to claw back some of the damage, given the lack of support in neighbouring zones.

US Gulf/Latin America

It was a disappointing week for VLCC owners here as there was virtually no activity on USG export which naturally led to a decline in freight rates just as adjacent markets began to improve. The ample tonnage availability for June means that owners will face more downwards pressure going forward. On the other hand, Brazil export enjoyed an active week, and rates appear to be following a similar trajectory to WAF and could see a further upturn next week if this current rate of activity remains. Today we are calling USG/China $8.20m & Brazil/China WS61.

North Sea

A good level of choice for charterers put Aframax owners on the back foot as we came out of the blocks in the NSea. Most spent their week programming with very little bread and butter business coming to the surface. Some have sat spot all week having been shown nothing, others have opted for the ballast but with surrounding markets still rather tepid most are not winning from this move. XNSea sits at around WS110, despite limited action it does feel like the slip is slowing and that we are around the bottom. Not a huge amount expected to change for next week with choice still a plenty.

Crude Tanker Spot Rates (WS)

Clean Products

East

The cargoes have come in abundance this week, both sizes have seen significant activity and as such lists have tightened right up and rates have jumped up with gusto. TC1 on subs at 75 x WS140, however, next will fall in the WS145-150 level. West stems have been super busy this week, $3.92m on subs, but expect upwards of $4.0m on next done. TC5 saw a big rate rise to 55 x WS160, however, it’s been repeated a few times and expect to hold steady until the next window opens. West runs need a true fresh test next week, but for jet suitable and less than 15yrs expect circa $3.2m. Owners will be buoyed heading into the weekend hoping to pick up with enthusiasm come Monday.

For Aframaxes in Asia, demand continue to be drip fed as the fixing window now moves into end of May. Vitol and Ampol are the only ones out there to test rates for north and Australia bound runs amid an ample supply of prompt vessel availability. Regional activity was almost obsolete for the Indo region this week as charterers will look to beat last done levels, again. Activity ex-Oz ticked up for early June and with the CPP market picking up steam, Aframaxes should be in contention for those barrels given the spread between the two sectors. Overall sentiment remains soft for the region, and we assess Indo/Oz at 80 x WS112.5.

UK Continent

For MRs, a week of mixed successes for both parties comes to an end, but owners today will be pleased at least the tonnage lists are looking a little slenderer and enquiry has started again. The main driver though unfortunately for this improvement has been the low fixing rates of 37 x WS115 which seems to have kick started some traders’ calculators, and with CPH festivities ending, it is only really seen now just how busy the market has been. WAF remains quiet but we do at least start to see some sniffing on the ULSD movements and hopefully coming into the office on Monday morning, we could see coming into next week a little bounce in owners walk. 

It has been an active week for Handies in the North as we have seen continued enquiry for XUKC stems. There was a healthy amount of supply on our tonnage lists come Monday and levels traded around the 30 x WS130 for XUKC with owners knowing a clear out of ships was required if the market was to shift. Come Thursday, TC23 firmed to 30 x WS135 and 30 x WS125 for UKC/MED with the weekend break now required to see if a few more ships firm up over the weekend. Potential here.

Med 

It has been a frustrating week for MR owners in the Med. Cargoes have trickled in providing the minimal amount of buoyancy needed to maintain last done levels at 37 x WS120 for Med-TA. Additionally, the prospects of rates firming are brought into question with the Med paying marginally more than the North, potentially drawing in ballast tonnage, putting charterers in the driving seat. However, with the market having traded sideways for most of the week and action happening behind closed doors, a fresh test is needed to understand its true levels. 

A rather positive active week for owners ends for the Handies in the Med with rates slowly increasing from 30 x WS130 levels to 30 x WS142.5 at last done. A lack of appropriate tonnage due to age and undesired history has been the main driving force behind this increase. Additionally, sentiment has sustained throughout with owners remaining bullish that they could make further gains. However, to do so, enquiry must pick up coupled with appropriate tonnage. It continues to feel like both owners and charters remain in standoff territory, waiting to review the activity before making next moves. 

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

Handy owners managed to secure steady increment throughout this week, despite the flow of enquiry being flat. Charterers were forced to move ahead of the natural curve as forward positions were clipped away keeping the position list tight for the duration.

The Mediterranean market finally saw some movement after the initial outlook looked bleak. Rates rose steadily with only marginal gains as a few failings halted rates being pushed further. A few ports causing ships to delay such as Alexandria should see owner start on the front foot next week.

MR

Keeping the theme of late, tonnage availability located within the region remained tight for the duration. The 45kt market has kept trading in and around the WS170 mark as charterers are forced to fix further ahead than usual. The Mediterranean has seen positions remain thin on the ground throughout this week. The market is need of a well-publicized test as owners will be feeling confident of setting a new benchmark to work from.

Panamax

The Panamax market remained steady as fresh enquiry remained slow. Availability has not been exactly plentiful but with no real enquiry, a steady outlook remains in place.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)

wk on wk changeMay 15thMay 8thLast Month*FFA Q2
TD3C VLCC AG-China WS564607163
TD3C VLCC AG-China TCE $/day4,50047,50043,00057,00041,000
TD20 Suezmax WAF-UKC WS-3868912096
TD20 Suezmax WAF-UKC TCE $/day-3,00032,25035,25055,75035,500
TD25 Aframax USG-UKC WS-1148149176157
TD25 Aframax USG-UKC TCE $/day-1,50035,25036,75046,75034,500
TC1 LR2 AG-Japan WS31142111127 
TC1 LR2 AG-Japan TCE $/day10,00032,75022,75028,500
TC18 MR USG-Brazil WS-24137161155167
TC18 MR USG-Brazil TCE $/day-5,00014,25019,25017,75018,250
TC5 LR1 AG-Japan WS28161133150146
TC5 LR1 AG-Japan TCE $/day6,50026,75020,25024,75020,500
TC7 MR Singapore-EC Aus WS38199161162175
TC7 MR Singapore-EC Aus TCE $/day6,25022,50016,25016,50017,000

(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis

Bunker Prices ($/tonne)

wk on wk changeMay 15thMay 8thLast Month*
Rotterdam VLSFO  +28466438452
Fujairah VLSFO  +21517496482
Singapore VLSFO  +28527499495
Rotterdam LSMGO  +38619581617

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