Contents
Table of Contents
Geopolitics Before Fundamentals
Geopolitical developments dominated tanker markets last year, with a wave of sanctions primarily targeting Russia, secondary measures aimed at entities trading Russian and Iranian crude, the brief Israel-Iran conflict, Trump’s inauguration, US trade wars, and the US-China port-fee standoff among the key events. So far, this year is proving just as “eventful” as 2025.
Recent developments in Venezuela have come as a major surprise, triggering a sharp reset in the country’s crude flows. Exports have shifted away from Chinese independent refiners operating via dark tonnage towards mainstream vessels, with most volumes for now remaining within the Atlantic Basin. While the picture is still evolving, initial barrels are likely to be directed mainly towards the US market. This has already contributed towards a sharp rally in Aframax rates, which reached multi-year highs in recent weeks.
Tensions surrounding Iran are also re-igniting. Although domestic unrest appears to have eased, the US is notably increasing its military presence in the Middle East, in a broader projection of force against Iran. Iran’s nuclear programme remains at the core of the dispute, and Tehran has already warned of retaliation in the event of an attack. As discussed in our recent weekly report Trouble in Tehran, the trajectory of events remains highly uncertain. However, for mainstream tanker markets, the risks are clearly skewed towards higher volatility. Any strike on Iranian oil infrastructure, disruption to exports, or attempt to block the Strait of Hormuz would have immediate and severe consequences for freight markets. A more structural shift would follow in the event of regime change. In addition, any military escalation between the US and Iran could reignite Houthi attacks in the Red Sea, with Houthi officials having recently issued fresh warnings.
Russia-Ukraine peace negotiations are also ongoing. The latest trilateral talks were described as “constructive” but failed to deliver meaningful progress, with further discussions scheduled for February. Whilst a comprehensive settlement remains elusive, if a deal is eventually reached, it would have far-reaching implications for oil flows, prices, mainstream tanker demand, sanctions, dark fleet demand, asset prices for ageing tonnage and demolition levels. In contrast, a failure to reach a settlement would likely result in tighter direct sanctions and more robust secondary measures, which would inevitably cause further disruptions in freight markets and potentially drive additional shifts in trade flows. Recent tanker seizures linked to Russian trade by US authorities in the North Atlantic and by French forces in the Mediterranean highlight that risk of intervention is rising, moving into largely uncharted territory.
More broadly, increasingly direct and forceful policy actions by the Trump administration are adding another layer of uncertainty. The recent threat to impose 100% tariffs on Canadian goods in response to potential Canada-China trade agreements is a clear example. Similarly, while Greenland-related tensions have subsided for now, they highlight potential risks to transatlantic coordination on trade, security, and sanctions enforcement.
US-China port fees have been paused for 12 months, but the outlook beyond this period remains highly uncertain. The issue may be used as leverage in future negotiations. Any renewed escalation would be particularly impactful for the VLCC segment, given that close to 40% of global VLCC trade is destined for China. While the US market is significant, nonetheless Chinese-owned or Chinese-operated tankers have plenty of alternative trading options across nearly all size groups.
In conclusion, geopolitical forces are set to remain the dominant driver of tanker markets this year. With conflicts unresolved, sanctions evolving, and trade policies increasingly unpredictable, volatility is likely to persist. More than ever, freight markets are being shaped by political decisions rather than purely by supply-and-demand fundamentals.
AG/China VLCC TCE ($/day)
Crude Oil
East
The AG VLCC market opened the week with fair amount of enquiry; nevertheless, freight rates came under pressure following last week’s softer close. This set a weaker tone compared to recent levels, with charterers testing lower numbers. Moreover, the political situation in the Middle East restricts activity. As the week progressed, a handful of fixtures were reported, and market talk suggested rates potentially dipping below WS100. Midweek activity remained muted, with fresh enquiry slow to surface and freight levels continuing to follow a softer trend. Despite limited visible activity, ships were quietly removed from the list through private deals, gradually tightening tonnage availability. Toward the end of the week, cargoes were still seeking coverage and activity showed signs of picking up. This helped stabilise the market, with owners’ sentiment firming as the list thinned, suggesting a more constructive tone moving forward as we already move up to almost 30pts this Friday.
The market in the East has stayed steady throughout the week on Suezmaxes, and the tonnage lists have constant with some real difficulty finding ships on early dates. Basrah/West via Cape is due a fresh test but we estimate levels to be around 140 x ws 82.5 with the option to ballast to WAF still seeming very attractive. With a booming VLCC market, expect Owners in the region to be feeling particularly bullish and to push the market over 130 x ws 165 for AG/East next week. Especially with geopolitical tensions remaining very high in the region, there is potential for this market to move rather quickly.
Activity on the Aframaxes in Asia tapered off toward the end of the week, though owners’ sentiment remained firm, with TCE earnings reaching 33-month highs of nearly $53,000/day. Earnings were last at these levels following Russia’s invasion of Ukraine, when rates later stabilised from peaks around $80,000/day. Owners remain bullish on the back of steady demand, tight tonnage availability, and strength across adjacent markets. Regional runs hit a new high of $1.3 million lumpsum, driven largely by increased lightering activity in Indo, which absorbed several units and further tightened the list. Vancouver and the AG continue to draw tonnage away from the region, while others have opted to ballast on spec. Momentum is expected to persist in the near term—albeit at a more measured pace, as overall ton-mile demand remains stretched. We close the week with the market firmly positioned, assessing Indo/Up at 80kt × WS215.
West Africa
The WAF VLCC market experienced a subdued start to the week, with little fresh activity reported on the surface. Owners’ sentiment softened early on as freight levels followed the downward trend seen in the AG. As the week progressed, visible activity remained limited. Freight stayed under pressure, with early dates appearing relatively balanced while later fixing windows showed more comfortable tonnage availability. However, as the week went on, the tonnage list gradually tightened as ships were picked off under the radar, reducing prompt availability. Overall, while the list initially remained on the longer side, the improving balance encouraged owners to become more resistant, holding back in anticipation of a pickup in activity. Toward the end of the week, some activity finally emerged, helping to stabilise the market. Freight levels firmed slightly, with last done reported around WS110, offering a more constructive tone to close out the week.
West Africa has been quieter this week, but levels are still steady with a strong market in the Americas providing an outlet for those who aren’t opening in the region or coming from the East. For TD20 owners will be looking to improve on 130 x ws 155 next week but at these levels pushing too much more is proving difficult. The premium to head East today is still around 7.5 points with a couple ships in the East keen for these runs there could even be potential to squeeze this premium a little lower.
Mediterranean
On Suezmaxes in the Med, TD6 has remained steady throughout the week at the 135 x ws 200 level. With a restricted pool of owners and higher perceived risk calling there it seems likely that we will see more of the same next week and perhaps even more for those with more stringent requirements. Libya/East has remained active this week in terms of enquiry with some prompt barrels up for grabs, there is a lack of ships needing to go East at the moment, so we freight a run into China at around the $7.2m mark today. In general, all eyes are on what is happening in the Middle East at the moment and there are some rather large expectations for the market should things continue to escalate.
For the most part, the Med Aframax market entered into a period of regularity in terms of fixing levels. Charterers were only too aware of the outcome of messing around for too long, unable to break the underlying resilience of ownres. A replacement cargo towards the end of the week served as a timely reminder that with so many market drivers still having a significant bearing on sentiment, the display of a flat market is entirely misleading. Finishing the week, WS250-255 for Ceyhan / or similar flat rate, until the recent weather delays abate, conditions likely to endure.
US Gulf/Latin America
The Americas VLCC market saw some early activity at the start of the week, with a couple of cargoes seeking coverage for prompt dates. This briefly raised the prospect of a tightening list and potential upside. However, momentum failed to build. Following a low fixing in Brazil, owners’ sentiment softened, with a reasonable amount of tonnage still available in the region. Activity remained thin, and cautious sentiment prevailed for much of the week. Toward the end of the week, although fresh enquiry remained limited, sentiment showed signs of stabilising. Slight improvements in adjacent markets offered some support, and owners will be hoping this translates into firmer conditions going forward.
North Sea
In an Aframax region not particularly synonymous with big movement, charterers were left to feel the full brunt of having to cover in a tight market. Coming into the week WS240 had just been set as a market peak, which whilst proven to not quite be considered where more regular stems should price, this movement had been the single largest swing for TD7 in one week since October 2023. Looking into why this happened, whilst the swing is eye opening to look at, the pull from surrounding markets has been considerably stronger leaving charterers on the continent with little choice other than to bring up owners TCEs, a theme that has remained constant through the week.
Crude Tanker Spot Rates (WS)
Clean Products
East
After a muted end to last week, all expected Monday to be busy and so it turned out. Rates took another step up with the activity pushing 75,000 mt Nap Ag/Japan up to ws210 and 90,000 mt Jet Kuwait/UKC to $4.75 million. LR1s saw similar progress with 55,000 mt Naphtha Ag/Japan pushing on past the LR2s to ws215-220 level. West rates were slightly untested but won’t be less than $3.60 million for 60,000 mt Jet Ag/UKC. The mood is still very tense with the US battle group now sitting off the AG and concerns of Iran being hit. Markets will hold either way for now with lists still tight and demand steady. But if any attack does come rates could see a rapid change.
The week opened under clear pressure as a slow end to last week and replenishing tonnage weighed on sentiment. Limited enquiry saw rates drop, with TC17 falling from ws 275 to ws 270 and TC12 correcting sharply, initially tested as low as ws 202.5 on a last veg ship. A healthy ballaster count early in the week reinforced the bearish tone, with 14 ships due Fujairah by 9 Feb, leaving Charterers firmly in control. Midweek saw an uptick in fixing activity which helped absorb some front-end tonnage. TC17 was repeated at ws 270 while TC12 firmed to ws 215, on an ex-DD unit. Despite this, cargo cover thinned quickly and fixing windows began to extend.
By the back end, the list appeared more balanced as ballaster numbers dropped steadily to 7 units before 10 Feb. While rates continued to repeat at last done, underlying sentiment improved, with Charterers increasingly fixing off-market. With tightening availability and heightened regional tension, momentum may begin to swing back in Owners’ favour next week, provided fresh enquiry emerges.
UK Continent
A bit of a rollercoaster for the MRs up in the continent this week with rates bouncing up and down but finally concluding in a positive manner. With poor weather in the States, the ULSD drive really kicked in Monday morning and by COB, TC2 had gained 20 odd points and with that, other routes also flourished. A handful of failures come Tuesday knocked the wind out of owners’ sails back down to ws120. This is where the rest of the non-ULSD charterers came into the market as they tried to let owners’ enthusiasm cool. Come Friday we are left with a tonnage list that is full of red (on subs) at the top, and with continued poor weather causing delays and a strong Med sector pulling WAF and south continent tonnage that way, the restocking of shelves will take a bit longer than usual. A positive end to the week for the owners and if we can see further enquiry early next week, opportunities to press further could well surface.
The front end of the tonnage lists has been tricky to navigate throughout this week with limited Handy supply available resulting in TC23 firming to 30 x ws190 and 30 x ws180 for UKC/MED. As we lack depth on Handies, those who are still looking to cover stems have had to quote basis 30-37kt in order to try and fix via MRs, which have also had a rebound in the second half of the week. Weekend break has come at a good time which should enable a few more vessels to firm up on itineraries come Monday. Owners are bullish here.
Med
After a dull prior week on the MRs, a successful weekend restock boded well for charterers giving them more options regarding well approved tonnage. As enquiry was drip fed into this market, however, the front end of the list was quickly chipped away, and we saw a fresh test at 37 x ws150 levels on a grade sensitive stem. It must be noted that with turnarounds beginning at EU refineries questions are being asked on how much volume there will be going forward. But lately any natural Med openers have the option of going short as the econs are justifiable, if this Handy market continues in its flipflop manner between ws250 and ws300. To close the activity this week now leaves charterers short on options for well approved tonnage. However, with a slow down in enquiry and improved rates drawing in ballast tonnage from WAF and Biscay, owners will be watching with a keen eye to see how this affects the fixing prospects of their units going forward.
The weather has continued to be the main talking point in this Med Handy market with port closures and disruptions a constant theme throughout a third consecutive week. At opening the regular enquiry seen was enough for owners to ask questions of the ws275 number and hence we saw highs of ws300. However, this was relatively short lived as business started going off radar with all parties disconcerted by the weather disruption, and it became a case of next done levels being sensitive to grade and well approved tonnage. The last few weeks have given way to a two-tier market which has allowed less well approved tonnage to limit owners rate ambitions. We are currently fluctuating in the ws250-ws300 range, with both ws260 and ws275 repeated on subs yesterday. Looking ahead it does not seem the weather will relent which bodes well for owners with eyes on how the list restocks and how much demand there will be.
Clean Tanker Spot Rates (WS)
Dirty Products
Handy
Overall, it’s been a relatively quiet week in North West Europe as enquiries have struggled to surface and relets heading to programme. Despite this, levels have firmed up this week. Early into the week, we saw a cargo struggling for cover fetch WS255 for xukc option, marking a 10 point rise from last done, soon followed by the equivalent of 30xWS260.6 covered for a more traditional xukc run, but since then, owners have lacked opportunities to test the market upward as relets headed into programme. Looking to next week, we expect to see a handful of units workable at the top of the list with sentiment remaining on the firm side for now. Should we see a fast start to the week, we don’t expect it to take much before rates firm upward.
The Med has seen another week frustrated by weather delays across the region, as some ports stay closed and days on demurrage days rack up for some. The week started with last done at 30xWS240, but enquiry was quick to surface early into Monday against the backdrop of a tight list and WS275 was quickly fixed to replace a late runner. These levels were soon repeated, but as the week progressed, cargoes struggled for cover and dates were pushed back before WS297.5 was fixed for a cargo out of the Adriatic with WS300 soon to follow. Next week, bad weather looks to remain an issue with owners eyeing replacements as a chance to test upward.
MR
NWE has seen little by way of firm enquiry this week, which may not be a surprise given the lack of ships through. Next up tonnage is split amongst few owners and we expect to see levels tested up toward the WS185 mark on next done. It’s been a somewhat different story in the Med as despite a relative lack of enquiry, due to the weather issues tonnage had stayed tight and levels were tested upward to 45xWS190 xmed and owners now eying up the WS200 mark for next done. A crop of vessels are expected to open around mid-first decade Emed, which could put a damper on ideas should enquiry pull back early into next week.
Panamax
Panamax enquiry ex UKC has been fairly muted this week as owners keep their eyes on the very hot TA market at the moment. Rate ideas for runs into the USG are currently at 55xWS180, but owners aren’t willing to hang around and instead prefer to ballast for cargoes ex USG/Caribs, where earnings are stronger. TD21 reached WS406.25 on Friday, with reports of 50xWS467 fixed this week, but we don’t think these levels are repeatable as things stand. West coast SAM and US markets remain healthy, with some owners choosing not to ballast back through the Panama Canal, causing thinning out supply. However, some cracks are starting to show in the Aframax market, which could see charterers barrel up as well as some owners looking to dirty up their LR1s. We think this could potentially take some of the sting out of the market in the near future.
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 | Jan 29th | Jan 22nd | Last Month* | FFA Q1 | |
| TD3C VLCC AG-China WS | -32 | 95 | 127 | 75 | 110 |
| TD3C VLCC AG-China TCE $/day | -38,500 | 80,000 | 118,500 | 61,750 | 92,250 |
| TD20 Suezmax WAF-UKC WS | 7 | 156 | 150 | 160 | 148 |
| TD20 Suezmax WAF-UKC TCE $/day | 3,750 | 74,750 | 71,000 | 78,250 | 63,500 |
| TD25 Aframax USG-UKC WS | 36 | 317 | 281 | 226 | 239 |
| TD25 Aframax USG-UKC TCE $/day | 13,000 | 94,750 | 81,750 | 61,250 | 60,250 |
| TC1 LR2 AG-Japan WS | 11 | 214 | 203 | 148 | |
| TC1 LR2 AG-Japan TCE $/day | 2,750 | 54,750 | 52,000 | 35,000 | |
| TC18 MR USG-Brazil WS | 44 | 231 | 188 | 181 | 193 |
| TC18 MR USG-Brazil TCE $/day | 7,500 | 29,500 | 22,000 | 21,250 | 20,500 |
| TC5 LR1 AG-Japan WS | 8 | 219 | 212 | 165 | 214 |
| TC5 LR1 AG-Japan TCE $/day | 1,000 | 39,500 | 38,500 | 28,500 | 36,000 |
| TC7 MR Singapore-EC Aus WS | -6 | 247 | 253 | 226 | 222 |
| TC7 MR Singapore-EC Aus TCE $/day | -1,750 | 29,250 | 31,000 | 28,500 | 24,000 |
(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis
Bunker Prices ($/tonne)
| wk on wk change | Jan 29th | Jan 22nd | Last Month* | |
| Rotterdam VLSFO | +21 | 446 | 425 | 417 |
| Fujairah VLSFO | +28 | 472 | 444 | 427 |
| Singapore VLSFO | +33 | 489 | 456 | 430 |
| Rotterdam LSMGO | +30 | 696 | 666 | 610 |
