Contents
Clean Catchup
The global CPP market remains firmly supported this week, with the same forces driving the crude complex now clearly visible in clean products — chief among them the ongoing risk to transits through the Strait of Hormuz. Rates have risen across the clean fleet, cargo flows continue to reroute around disrupted Middle Eastern supply chains, and refiners globally are running hard to capture historically strong margins.
In the Middle East, CPP flows out of Yanbu remain disrupted under Houthi threat. However, clean exports from the Mideast Gulf and Gulf of Oman surged to around a preliminary 2.4mbd in September from 1.4mbd in August, partly supported by the complete recovery of the 922kbd Ruwais refinery, alongside an increase in Strait of Hormuz transits run mainly on regional producers’ fleets repositioned back into the region in recent weeks. A favourable East-West spread continues to push Middle Eastern and WCI middle distillate cargoes westwards, lifting LR demand. High cargo volumes are meeting tighter tonnage as active dirty-up activity continues — with at least 100 units of coated LR2 now engaged in dirty service, leaving overall LR tonnage fairly limited. A few westbound maiden Suezmax voyages have also been seen this month, whether reflecting the stretch on conventional LR tonnage or simply the economics of moving larger parcels westwards.
LR2 (WCI-UKC) have climbed to high-$120,000s/day as of the latest rate data, from around high-$50,000s/day in August based on our assessment. MR earnings (TC12) also drew strength from the larger segments, rising to around $40,000/day from roughly mid-$10,000s/day over the same stretch, although eastward cargo volume declined with the shift in trade flows — ME/WCI clean product exports into the East have fallen sharply to around 500kbd in September from June’s peak of roughly 1.16mbd.
Activity within the Far East remains high, driven by strong exports out of the North. High margins are keeping refiners running at elevated rates, though the recent rise in crude oil prices is narrowing those margins. Preliminary AIS data shows Chinese product exports reached 1.08mbd in September, the highest level since March 2024, up from around 780kbd in July when the export ban was lifted. Regional LRs, which typically position in Asia Pacific after discharging naphtha cargoes, are increasingly being fixed onto long-haul westbound runs into East Africa and Europe — a favourable outcome for owners, since it removes the long ballast leg otherwise needed to bring vessels back East. These dynamics are also tightening LR supply in the Middle East.
Pacific MR TCEs have surged to around mid-$60,000/day, more than double the mid-$20,000/day seen in early August. The Atlantic basket tells a much quieter story, holding in a narrower band and last near mid-$30,000/day — broadly steady rather than tracking the Pacific’s rally. The Atlantic MR market is mainly supported by USG exports, which have risen sharply alongside higher refining rates since the war began. Still, the West remains persistently short of middle distillate cargoes given the loss of Middle Eastern products, a squeeze deepened since Yanbu supply was disrupted. Hiccups in Russian refinery runs, following a spate of drone attacks, have compounded the tightness further. September flows show that Turkey and Brazil, traditionally the two largest buyers of Russian diesel, are now relying primarily on the USG, a clear illustration of how the supply map has been redrawn. On the other side of the Atlantic, the recently widened East-West naphtha spread has made eastbound economics more attractive, supporting LRs in the region, though the upside remains capped by sluggish Asian petrochemical demand.
The outlook remains clouded by uncertainty. Geopolitical risk continues to be the dominant swing factor across global CPP supply: any price change, refining margins and product spreads, which in turn can redirect trade flows, and a change in export policy anywhere could quickly dent cargo volumes and put downward pressure on rates. Rate volatility in crude segments could also cascade into clean segments — if crude strength persists, LR2 tonnage could tighten further still as lucrative earnings prompt more dirty-up activity, spilling over into further MR strength, though the remaining newbuild schedule (around 23 LR1/LR2s and 52 MRs due for the rest of the year) may cap how far rates can run.
In the East, market talk is building that Beijing may sharply restrict — or even suspend — October product export quotas, a reversal from August’s surge that would remove a meaningful chunk of the cargo volume currently supporting LR and MR demand out of the North. South Korea’s refining picture is also worth watching: despite efforts to diversify crude sources, the country still faces supply constraints and could again lean on its strategic reserve to bridge the gap — if supply remains constrained regardless, refining rates would come under pressure, and with them, clean vessel demand out of Korea.
In the West, a possible US diesel export ban — still at the “studying feasibility” stage per the US Treasury — would be a bearish wildcard if enacted, as cargo volumes out of the region would decline. A recovery in Russian refining rates would also reshuffle flows, reducing reliance on USG supply and easing some current tightness. On the upside, winter heating demand and weather-related disruptions remain supportive factors that could keep rates elevated even as these variables play out.
Asia Pacific CPP exports by Sizes (kbd)
Note: September export volume is based on latest data available.
Crude Oil
East
The AG/Red Sea VLCC market opened the week with firm sentiment, supported by outstanding cargoes and a relatively tight tonnage list. As the week progressed, activity remained limited and rates largely stabilised, although TD34 printing lower for the first time since mid-August provided the first indication of potential downward pressure. Some tonnage continued to disappear under the radar, but the list gradually rebuilt towards the end of the week. Overall sentiment remains firm, although the improving availability could begin to soften rates should enquiry remain limited.
The Suezmax market in the East remains firm, with tensions still high and monstrous VLCC rates enough to suck in the Suezmaxes. Expect this market to stay steady to firm for the foreseeable.
Asia Aframax earnings continued their climb this week, pushing into the $115k/day range as the market draws to a close. Despite a handful of enquiries surfacing, fixing activity remained relatively slow as owners maintained bullish ideas, supported by stronger earnings across the Pacific. Indices continued to firm against a tight position list, leaving several cargoes still uncovered as charterers struggled to match owners’ expectations. With earnings now beginning to align with adjacent markets, owners remain well positioned heading into next week, where outstanding requirements should provide a fresh test of prevailing levels. Overall sentiment remains firm, and we close the week assessing Indo/Up at 80kt × WS410.
West Africa
The WAF VLCC market remained relatively quiet throughout the week, with limited fresh enquiry and rates initially holding steady. Firm Suezmax levels provided some early support, while charterers potentially needing to attract ballasters from the East also helped maintain owners’ position. However, activity increasingly shifted towards smaller sizes, and pressure from the Atlantic gradually weighed on sentiment. Freight softened slightly towards the end of the week, and a fresh pick-up in enquiry will be needed to prevent further pressure on rates.
For the WAF Suezmax sector, we have started to see some cracks beginning to show on TD20, but things haven’t fallen away massively. Owners are still overall quite bullish and are expecting rates to remain firm. We estimate a Bonny/Rotterdam run today to be somewhere around the WS445 mark, with East runs still commanding a hefty premium and looking to be more at the WS510 level.
Mediterranean
TD6 has stayed relatively steady despite the uptick we saw in West Africa, with WS500 repeated multiple times. It seems hard to fathom that we don’t see a reaction in rates, and owners will expect this to firm next week. The Med has been steady this week in terms of enquiry, but the healthy numbers of prompt ships have kept some pressure on rates; they have largely disappeared now and will need replenishment over the weekend to lengthen the tonnage lists.
In what has been a successive week for Aframax owners in the Med, freight rates have reached what can only be described as “dreamland” realms. Furthermore, with constant fixing in the 600s, we surpass the average highs seen back in March. This time round, the Med initially drives the US, and now support from surrounding sectors prevents rate erosion even where fixing intensity has cooled. Thoughts of “how much higher can it go” appear, although it would seem that for the time being the bottom isn’t about to fall out from under us — especially when, at time of writing, the US creeps ever closer to WS700.
US Gulf/Latin America
The States VLCC market saw limited activity throughout the week, with freight initially holding at elevated levels following the previous market strength. Charterers increasingly looked towards smaller sizes, allowing the VLCC tonnage list to gradually rebuild, while IOC enquiry provided one of the few fresh tests and broadly confirmed prevailing levels. Further south, recent activity began to soften Brazil rates towards the end of the week. With the list now more balanced and enquiry remaining limited, fresh cargoes will be needed to provide clearer direction and determine whether softer levels can attract renewed interest.
North Sea
The North Sea tends to be the poorer cousin of the Med and States markets, due to the presence of locally stationed tonnage. However, we have finally had a clear-out of tonnage, and even the usual candidates have been tempted to ballast for longer Med-to-UKC voyages. As such, we now enter a period where unusual owners can make the difference, and have done. Rates have climbed from low-to-mid 300s cross-North Sea and have even breached the 400 marker. As we reach the close, and surrounding markets go from strength to strength, we see no let-up in the climb here also.
Crude Tanker Spot Rates (WS)
Clean Products
East
A huge week for the LRs, where levels have reached uncharted territories as each next done sees owners pushing levels higher! TC1 on subs at 75 × WS470 and TC5 on subs at 55 × WS500. The list of safe ships is very thin, and as such charterers are being forced to try to cover more forward dates to avoid being caught out. Both LR2s and LR1s have uncovered cargoes heading into the weekend, and owners will only be pushing for more come Monday.
A strong week in the AG saw owners retain control throughout, with rates continuing to climb across all sizes. TC17 set the tone, progressing from last done levels early in the week to WS500 before reaching WS550 on subs by Friday, while East runs firmed in line. Despite periods of limited visible enquiry, a steady flow of off-market business and a healthy outstanding cargo list kept pressure on an increasingly tight tonnage position. Forward fixing into the first decade of October has also helped absorb available ships and provide owners with firmer itineraries.
Support from the surrounding markets remains significant, with LRs continuing to push and MR markets further east showing little sign of easing. With natural dates tight and fresh enquiry still surfacing, sentiment remains firmly in owners’ favour heading into next week.
UK Continent
A good level of enquiry across the board has seen this sector slowly build momentum, and as Friday hits with 10+ outstanding cargoes, we anticipate rates to progress further north. TA has continued to remain desirable, especially with the USG market pushing up also, and therefore we might not quite see the peaked rates as for other routes. XUKC has been active with handies thin on the ground, but with WAF seeing a number of Tema requirements as well as late runners, partnered with a good number of fresh stems, we have a melting pot of potential here.
On the handies – as per usual, we see MRs giving charterers alternative options for the local XUKC moves, which in turn has led to rates here not showing their true potential. This statement was correct for the majority of the week, but with enquiry on MRs picking up come Friday, we expect fewer options and for the few handies in the area, potential to see further gains ahead.
Med
A fairly steady week for owners. With the North poised to firm further, bullish sentiment has truly seeped into this Med market. That said, it is very much a position, grade, and options game for now, as owners look for exit options (the East has a particular draw, offering good returns). Looking forward to next week, we expect the theme to continue.
In all, it has been a rate-positive week for handies in the Med, with levels firming to around the WS270 mark. After a couple of days of regular enquiry, and inflated bunker prices was enough for owners to further build on the momentum built up at the end of last week. It is thought, with minimal next-month enquiry seen, we could be in for another active week, which will only serve to confirm owners’ position in the market. One question to ask is: how will charterers play their cards going forward to counter this bullish segment?
Clean Tanker Spot Rates (WS)
Dirty Products
Handy
There were a few options available for charterers to explore, though a quieter market left rate ideas steady, with expectations that last done at WS295 would be repeated. The list then tightened quickly, with only a handful of enquiries needed to absorb available tonnage. As a result, rates firmed to WS300, before strengthening further, with WS305 being reported.
There were a number of prompt vessels on the list following the weekend, with some beginning to accrue idle days and keen to secure employment. As a result, the market struggled to build on recent gains, with WS275 repeatedly reported throughout the week. Activity levels remained healthy, however, and by week’s end the list had tightened considerably. With forward fixing beginning to emerge, owners’ rate ideas are now expected to sit around WS280.
MR
The market remained relatively scarce for MRs, with limited naturally placed tonnage and a reliance on WMed ballasters, though rates held steady around WS200-205. As the week progressed, availability continued to depend on WMed units. Given the firmer sentiment seen in the Med MR market, expectations were for a similar shift here, with rates expected to firm towards WS205-215.
MRs dwindled across the Med, leaving owners expected to firm their sentiment with rate ideas around WS210-215. As the week progressed, MRs began fixing on forward dates, while market talk suggested some Aframax stems could be split, given the strength of the Aframax market. As a result, sentiment improved further, with rates reported around WS225.
Panamax
Panamax openings were predominantly concentrated in the Med, with owners hoping stronger Aframax sentiment would generate additional interest and support rates around WS200. However, this failed to materialise, with a number of Panamaxes instead positioning towards the Gibraltar Strait and looking to ballast back rather than wait on limited backhaul opportunities. Nevertheless, surrounding market strength continued to underpin sentiment, allowing owners to maintain rate ideas around WS200.
CBS-USG Panamax rates opened the week around WS510-520, with tight tonnage and geopolitical uncertainty keeping owners firmly in control. As the week progressed, longer employment continued to absorb available vessels, gradually tightening regional availability and supporting levels towards WS520-530. Despite relatively measured enquiry, sentiment remained firm throughout, with owners showing little appetite to soften ideas as the week drew to a close.
Dirty Product Tanker Spot Rates (WS)
Rates & Bunkers
Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)
| wk on wk change | Sep 24th | Sep 17th | Last Month* | FFA Q3 | |
| TD3C VLCC AG-China WS | 18 | 1,158 | 1,140 | 623 | 619 |
| TD3C VLCC AG-China TCE $/day | 22,250 | 1,292,500 | 1,270,250 | 678,500 | 658,750 |
| TD20 Suezmax WAF-UKC WS | -19 | 435 | 454 | 238 | 284 |
| TD20 Suezmax WAF-UKC TCE $/day | -10,750 | 242,000 | 252,750 | 117,750 | 136,750 |
| TD25 Aframax USG-UKC WS | 99 | 558 | 459 | 202 | 346 |
| TD25 Aframax USG-UKC TCE $/day | 38,500 | 175,250 | 136,750 | 43,000 | 88,250 |
| TC1 LR2 AG-Japan WS | 49 | 876 | 826 | 540 | |
| TC1 LR2 AG-Japan TCE $/day | 17,250 | 265,000 | 247,750 | 155,500 | |
| TC18 MR USG-Brazil WS | 25 | 299 | 274 | 262 | 283 |
| TC18 MR USG-Brazil TCE $/day | 5,250 | 35,250 | 30,000 | 30,000 | 29,000 |
| TC5 LR1 AG-Japan WS | 48 | 890 | 843 | 579 | 603 |
| TC5 LR1 AG-Japan TCE $/day | 12,250 | 194,250 | 182,000 | 120,500 | 120,250 |
| TC7 MR Singapore-EC Aus WS | 29 | 473 | 444 | 315 | 319 |
| TC7 MR Singapore-EC Aus TCE $/day | 5,500 | 60,000 | 54,500 | 35,000 | 32,750 |
(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis
Bunker Prices ($/tonne)
| wk on wk change | Sep 24th | Sep 17th | Last Month* | |
| Rotterdam VLSFO | -49 | 674 | 724 | 661 |
| Fujairah VLSFO | -41 | 972 | 1,013 | 792 |
| Singapore VLSFO | -56 | 847 | 903 | 770 |
| Rotterdam LSMGO | -113 | 1393 | 1,505 | 1,200 |
