Open for business?

The latest ceasefire between Israel and Hamas has again raised hopes of a normalisation of Red Sea transits for commercial shipping. Earlier this week, the Houthis announced a pause to attacks on commercial shipping provided the ceasefire holds. Whether this will be enough to convince mainstream shipowners as well as insurance companies that the Red Sea is safe to cross so far remains highly uncertain. If the Red Sea is once again seen as a safe route, how would that impact tanker markets?

Large scale rerouting via the Cape of Good Hope has especially affected the clean tanker trade. 2024 saw over 90% of clean volumes from the Arabian Gulf and West Coast India to Europe sail around the Cape, giving a significant boost to clean tonne miles and freight rates, with LR2s the main beneficiaries. Later in the year, VLCCs and Suezmaxes started cleaning up and cannibalising this trade, which saw freight rates drop significantly. Whilst this trend has moderated since, Suezmaxes especially have continued to regularly carry clean cargoes on this route. However, throughout 2025, clean volumes from the East to Europe using the Suez Canal have increased sharply, averaging around 40% of the total so far this year, following an accelerating trend.

This partial resumption has seen LR2 tonne mile demand decline, and a full normalisation of Red Sea transits should see a further decrease in vessel demand for LR2s. LR1s and MRs, which have been losing market share to LR2s, could regain some lost ground. MRs could increase their share of Middle East-Europe trade, particularly for Mediterranean discharges. However, this could be offset by a corresponding decline in USG to Europe trade on MRs.

On the dirty side, the impact has been much more limited, as a far smaller share of global crude exports has been impacted. Here, 2025 has also seen accelerating volumes routing via the Suez Canal throughout the year which has supported demand for Suezmaxes. Normalisation of crude trade through the Red Sea should see a decline in VLCC trade to Europe, with more barrels being shipped on Suezmaxes via the Suez Canal. Greater volumes here could see lower demand for crude from the US Gulf, pressuring Aframaxes and freeing up more crude for long haul trade to the East on VLCCs. If there is a substantial rebound in Black Sea/Mediterranean shipments to Asia this could also benefit Suezmaxes. All in all, the impact here is expected to be limited, with some potential upside for Suezmaxes. However, a key downside risk for Aframaxes could be increased competition from LR2s.

Thus far, the situation in Gaza remains volatile and any consequent Houthi actions hard to predict. Regardless, it will take time for normalised trade patterns to reestablish themselves, and it may be that a more secure and long-term peace deal is needed for complete normalisation of Red Sea transits.

Middle East Gulf (excl. WCSA) and India to Europe Clean Trade (kbd)

East

The week began quietly for VLCCs in the AG, with limited enquiry reported as Bahri week got underway. Most activity was expected to take place under the surface, and freight levels were on the softer side, with the hope that a pickup in enquiry would lead to rates stabilizing. As the week progressed enquiry soon started to flow, and at one stage there were 10 reported cargoes working out of the AG. There was soon a race to find cover and where information flow was not moving as usual, trying to pinpoint exactly what was paid when was a struggle. Sentiment was moving in owners’ favour and those charterers that did step out faced strong resistance to fix even at last done levels. Now that industry events are concluded and looking ahead to next week, we can solely focus on the first decade of December.  Today we are calling AG/East ws130 and AG/USG ws67.5.

Suezmax rates in the East remain firm, with a strong VLCC market and a tight list it seems likely that owners may achieve higher than the much-repeated 140 x ws75 via AG/West via Cape. Rates to head East are also very firm, and with limited tonnage available, approved units will look to maintain the rate paid on an option of 130 x ws175.

Bahri week paid dividends to owners this week, pushing the TD14 to a year-high of WS171.8, with northbound runs achieving premiums of around WS10 points. The tonnage list for 2H November initially appeared balanced on a softer second decade, until a surge of requirements midweek tightened positions significantly. Several private deals were concluded, but rates held firm at last done or slightly better. With prompt positions now scarce, new benchmarks have been set as the market moves into next week — when most participants return to their desks and information flow should improve. Charterers may look toward smaller sizes for coverage, though those markets remain equally firm, keeping Aframaxes competitive at current levels. Sentiment stays bullish as we close the week assessing Indo/Oz at 80 x ws180.

West Africa

The WAF VLCC market began the week on a slow note, with limited visible activity following last week’s quieter spell. Owners were hopeful that fresh enquiry would emerge to help establish a clearer view. As the week progressed, the region followed the firming trend seen in AG, with rates gradually increasing despite the lack of on the surface activity. Owner sentiment continued to improve, supported by shrinking availability across the list. Momentum remained firm into the latter part of the week, with strength in other regions continuing to support the WAF market. Today we are calling WAF/East ws120.

West Africa remains firm after a minor blip earlier in the week, with high levels of activity in CPC and the Atlantic to end the week. Owners are likely to push back up to 130 x ws160 for WAF/UKCM.  With such good returns on offer, owners are less hesitant to lock in to go East, and the premium has been eroded down to around 2 points.

Mediterranean

TD6 remains firm and with 40 stems on the program for next month due to be loaded on Suezmax, owners will be feeling very optimistic. Next-done levels are likely to push to around 135 x ws170 with some tricky cargoes outstanding that are yet to cover. We have seen a growth in enquiries for Med/East in the previous few weeks, which has soaked up those who needed to head that direction. Owners now for Libya/Ningbo are likely to be looking for in excess of $6.5m.

In the Med rates look pretty flat on face value where the disruption of Bahri was clear to see, and at best activity had been drip fed into the market. However, despite tonnage begging to accrue for the immediate fixing windows ahead, those left seeking to cover shorter flat cargoes were met still with a rather bullish trend.  Sentiment is suggesting that tests are needed with benchmarks being estimated down rather than based on anything factual. Furthermore, despite surrounding larger markets looking really quite positive, signals are perhaps pointing towards a brief reprieve for charterers looking to momentarily claw back some value.   

US Gulf/Latin America

 The USG VLCC market began the week in a steady state, with rates holding and owners showing confidence that current levels would persist. A tightening tonnage list supported this sentiment as charterers looked to cover end third decade stems. As the week progressed, fresh enquiry arrived, with charterers having difficulty trying to get last-done levels concluded. This was due to owners being resistant and the list lacking much availability, and it was not long until rates moved up and now hover around the $14.0m mark. The Brazil export market also saw some a steady flow of enquiry and much like the surrounding regions levels here pushed further upwards. Today we are calling USG/East $14.0m & Brazil/East ws117.5.

North Sea

The continent showed resilience again this week where activity maintained at slow pace all week, though one replacement still managed to show that there is a degree of underlying confidence. A slight increment on last done was momentarily achieved (ws160), with subsequent deals pricing within just 2.5 points – A cycle that has maintained and now continues to repeat. Looking ahead, whilst the lists continue to strike an equilibrium, it’s hard to anticipate much volatility in any direction. 

Crude Tanker Spot Rates (WS)

Clean Products

East

A lot going on behind the scenes for the LR2s as Bahri week has been in full swing. The list remains tight and expect to see rates positively correct once everyone runs fresh lists come Monday and sees just where the lay of the land is. TC1 for now at 75 x ws142.5 and UKC around the $3.9-4.0m mark. Similar for the LR1s although maybe not quite as busy, but enough to keep things ticking over. TC5 at 55 x ws147.5 and West runs at $3.0m. Again, expect to see more fixture coming out of the woodwork in the next 48h hours as the dust settles post Bahri.

On MRs, Bahri week kept most fixing under the radar, giving the impression of a quieter market despite a steady flow of deals being concluded directly between principals. TC17 held steady in the 35 x ws215–220 range as the front-end stayed tight, while more Singapore ballasters creeping West helped balance the list further out. TC12 tracked sideways at 35 x ws145–150, with little to shift sentiment either way. A few cargoes roll into the weekend, including one into early December. With so much of this week’s activity done off-screen, Monday’s fresh lists will be key to seeing how much tonnage has actually been cleared.

UK Continent

With differentials disconnected each MR route seems to be trading pretty independently which means “all options“ deals are likely to price slightly higher, if a charter can secure all options. This has become the new trend as owners have become very picky on what routes and options they are willing to give strategically. The TA run has boosted up to 37 x ws130 off the back of a marginal increase in activity. Charterers looking for last cargo CPP ships have struggled a bit of late due to the plethora of laden units. A lot of deals at the moment are based on last cargo palm oil or bio, and units with Russian history have been common, and thus rates have been quite variable. In general, rates are heating up slowly and with more bad weather inbound, as well as greater seasonal demand combined with some refineries coming back online we expect that rates will incrementally increase across the board towards the end of the year. 

A surge of enquiry was quoted at the start of the week for Handies in the North which resulted in XUKC firming to 30 x ws190 as limited supply was available for charterers to pick and choose from. Although as the week pushed on, a few failures and a period of inactivity on Thursday/Friday has resulted in the tonnage list now being repopulated with units. A fresh test is now required for a vanilla XUKC although it does feel off natural fixing dates last done levels will be there to be tested. Still not much desire for UKC ships to entertain UKC/MED runs which could see this run hold its value for the short term. Fresh look required at tonnage list come Monday to see the potential depth of ships after the weekend break.

Med 

A compounding week for MR owners in the Med. As with most markets Bahri week caused a slower market, yet, as we progressed, we saw more action on the charterers side – coupled with a tight list there is some positive rate pressure in this market. Additionally, Med MRs have somewhat piggy-backed off the potential TC2 has shown throughout the week thus last done sits at 37 x ws125 for Med-TA, up 15 points from the start of the week. With USG rates supposedly topping out and signs of some shifts in the North differentials will need to be reassessed on Monday. WAF runs have slowed so we do expect this differential to narrow at some point. Potential. 

In all it has been a positive week for owners of Med Handies. We opened in a very quiet market due to many people in the industry traveling for Bahri week, which created a fog of confusion surrounding rate stability. We saw a low of 30 x ws162.5 get done XMed on a last MTBE vessel. However, steady enquiry came about and tightened an already sparsely populated list. Some tricky stems have added to this upward pressure with ws190 going on subs ex-Libya. Lots of business has gone under the radar, however, ws180 XMED is last done – with owners not wanting to jump the gun and push rates too hard too quickly – instead opting for a more organic firming as the list naturally tightens due to the steady enquiry we have seen. Eyes on next week to see how much vigour this market has in it. Potential.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

It’s been a quiet week for this sector across both regions with little for owners to sink their teeth into, as enquiry struggles to surface. Relets head into programme keeping some enquiry out of the market for 3rd party tonnage providers. Modern vessels are workable at the top of the list, and levels here look set to be tested down to the WS230 mark as we head into next week. The Med has been the busier of the two regions but under the radar activity and off market deals rule the roost. The list still leans in charterers favour at the moment with rates currently at ws180 but we think that levels could come off further as we head into next week.

MR

MRs have seen a lack of opportunity this week in both regions as enquiry stays elusive. Tonnage is available to work in the Med where a fresh test is needed. We expect next done rates to be around the ws155 mark for a standard XMed cargo. In the UKC naturally placed tonnage has been scarce with available units being would-be ballasters from WMed. This market also needs a fresh test, but we expect deals to be done around the ws165-170 mark early next week.

Panamax

TD21 has seen rates slowly trend downward this week as the region begins to cool off. Rates started the week around the ws210 mark before closing out the week with ideas at ws200 by close of play Friday. We expect levels to continue to slide into next week. Activity in Europe has seen vessels clipped from the list, despite that ideas hold steady at ws115-120 for runs into the USG.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

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

wk on wk changeNov 13thNov 6thLast Month*FFA Q4
TD3C VLCC AG-China WS1912911095107
TD3C VLCC AG-China TCE $/day24,500131,250106,75088,75098,500
TD20 Suezmax WAF-UKC WS-3157160132142
TD20 Suezmax WAF-UKC TCE $/day-1,75078,25080,00062,75066,000
TD25 Aframax USG-UKC WS-6214220167200
TD25 Aframax USG-UKC TCE $/day-2,00060,25062,25043,00050,750
TC1 LR2 AG-Japan WS11144133104 
TC1 LR2 AG-Japan TCE $/day4,25035,75031,50021,750
TC18 MR USG-Brazil WS72241169296229
TC18 MR USG-Brazil TCE $/day14,00034,75020,75045,50030,500
TC5 LR1 AG-Japan WS0150150114156
TC5 LR1 AG-Japan TCE $/day75024,50023,75016,75025,500
TC7 MR Singapore-EC Aus WS12196184185190
TC7 MR Singapore-EC Aus TCE $/day2,25023,25021,00021,50021,500

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

Bunker Prices ($/tonne)

wk on wk changeNov 13thNov 6thLast Month*
Rotterdam VLSFO  -7425432421
Fujairah VLSFO  -2453455450
Singapore VLSFO  -9455464449
Rotterdam LSMGO  +15728713640

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