Running Out of Room?

US crude exports have grown strongly in recent years, making the US a key source of global crude supply. This raises the question of how much export capacity the US actually has. According to Kpler data, exports peaked at around 5.2 mbd in Q2, when releases from the US SPR lifted volumes by close to 1.3 mbd, or more than 30%, on the previous quarter. This shows both the scale of implied US export capacity and how flexibly it responds to market conditions.

The surge was short-lived, however. Q3 volumes have retraced by around 1.5 mbd to approximately 3.7 mbd, back towards longer-term averages. Strong domestic refinery runs have absorbed barrels that might otherwise have been exported, as refiners chase exceptionally firm product margins.

Delayed maintenance, particularly among PADD 3 refiners, has also kept domestic crude demand strong. Even so, the Q2 spike shows what the US can achieve when export economics and supply align. It also highlights the spare capacity that exists when volumes recalibrate towards longer-term averages.

An important question for the tanker market is whether proposed VLCC-focused infrastructure will go ahead and raise this capacity further. At present, this looks uncertain: of the four proposed deepwater terminals, only Sentinel Midstream’s Texas GulfLink is progressing. It was licensed in February 2026 and construction began in May, with funding under the US-Japan Trade Agreement helping to advance development.

The terminal is targeting a start-up in Q4 2028. Enterprise’s SPOT was licensed in 2024 but still lacks a positive FID and appears to have stalled, with no fresh guidance on timelines. Energy Transfer’s Blue Marlin remains unlicensed as the company shifts its focus to upstream investment, particularly in natural gas. Phillips 66 and Trafigura’s Bluewater Texas is also unlicensed and faces EPA air permit issues.

As a result, US VLCC exports will remain reliant on reverse lightering for at least the next two years. The VLCC share of PADD 3 crude exports rose to around 50% in May and June, fell below 30% in August and recovered to around 45% in September, while Aframaxes continue to carry a substantial share of exports. This reliance on lightering can limit VLCC export capacity when crude exports trend higher, as Aframax availability and ship-to-ship logistics become a bottleneck.

Project cost inflation has also become a central issue for US energy export projects. Rising labour, construction material and legal/regulatory costs could all erode project economics and commercial viability, making this an important theme to monitor. If these pressures prevent new VLCC terminals in PADD 3 from coming online, longer-term US crude exports could suffer. This has clear implications for marketing US crude into Asia, where longer-haul trade fundamentals favour VLCCs over smaller tonnage.

This matters because, with demand in advanced Western economies on a downward trajectory, surplus US barrels will increasingly look East. That will put more focus on moving crude efficiently on VLCCs, especially as competition from Latin American producers into Asia grows.

The lack of progress on most proposed USG deepwater terminals could therefore become a constraint. Existing infrastructure has shown it can handle higher export volumes for short periods, but further growth in long-haul exports will increasingly depend on direct VLCC-loading capacity in order to optimise freight economics. Texas GulfLink is a positive step, but with the wider project pipeline still uncertain, US export infrastructure may struggle to optimise with the shift in crude trade towards Asia.

US Crude Exports (kbd)

Crude Oil

East

The AG/Red Sea VLCC market started the week with firm sentiment, although a rebuilt tonnage list gradually gave charterers more control. Rates softened slightly as the week progressed, despite some tonnage disappearing under the radar. Towards the end of the week, further vessels were picked off and some ballasters were attracted into the region, helping freight stabilise and regain prior levels. The market closes the week relatively firm.

The Suezmax market in the East remains firm, and after this week in the Atlantic basin, rates are going to have to push up to compete with the returns on offer in West Africa, to prevent owners deciding to ballast west. Expect strong expectations here from owners, making it a very difficult market to charter ships.

Asia Aframax earnings now command a premium over Vancouver run, a notable reversal from the historical relationship between the two markets. Steady regional and west-to-east demand tightened the tonnage list significantly, while a fresh TD14 test provided greater clarity on prevailing levels. Several cargoes remain outstanding at the time of writing, keeping sentiment firmly supported as owners retain considerable leverage over the remaining positions. With Chinese Golden Week ahead, activity may slow as participants step away, though the tight supply-demand balance should continue to support rates at current levels. We close the week firm, assessing Indo/Up at 80kt × WS560.

West Africa

The WAF VLCC market started the week quietly, with limited enquiry and a gradually rebuilding tonnage list putting pressure on rates. Activity remained subdued through much of the week, with smaller sizes attracting more interest. However, a strong surge in activity towards the end of the week quickly tightened VLCC availability, while a firmer Suezmax market added further support. Sentiment has therefore shifted back towards owners, with freight expected to remain firm heading into next week.

WAF Suezmaxes have soared to never-before-seen heights this week, and with a limited supply of tonnage to cover the demand for end-month, owners remain firmly in the driving seat. A pretty much non-existent VLCC list to ease the pressure is keeping plenty of fuel on this fire, especially with more stems that need to be covered before the end of October. Rates for WAF/UKCM have reached WS825 for UKCM, and there is an expectation that they will climb even higher.

Mediterranean

TD6 had stayed relatively constant despite the activity in the Atlantic, but on Friday we saw this market catch up, with WS900 paid for TD6. The position list remains tight, and with the market in the Atlantic still booming with plenty to cover, it’s most likely we see things stay exceptionally firm here also. Similarly to the rest of the West, the Mediterranean remains firm; we have seen a few deals done for Med/East earlier in the week, but expect those rates concluded ($23m) to be well in the rear-view mirror, as owners will be pushing for a lot more to send their ship east.

Another hugely profitable week for Aframax owners in the Mediterranean, although for the first time in some time the market appears to be taking a breather rather than charging relentlessly higher. Having started the week with cross-Med business regularly fixing in the mid-WS600s territory, charterers were once again confronted with tight lists and limited prompt options.

Early momentum was aided by continued support from surrounding sectors, with strong Suezmax sentiment helping to keep Aframax owners in good spirits. As the week progressed, fixing volumes reduced and sentiment shifted from outright bullish to cautiously steady. Rates eased marginally from the week’s peaks, but owners’ optimism is supported by port delays and strength in the US Gulf. By the week’s end, cross-Med values remained around WS620-630, and with the US pull likely to absorb available ships, there remains little evidence of a significant correction just yet.

US Gulf/Latin America

The States VLCC market initially showed a softer tone, with limited enquiry and several fixtures further south concluded below last done. Tonnage availability remained relatively balanced, while Suezmax enquiry continued to stretch further forward as Atlantic positions tightened. Towards the end of the week, some activity appeared under the radar despite a failed USG deal, while the sharp firming in WAF provided renewed support to Atlantic sentiment. The market now awaits fresh enquiry to see whether this strength will translate into firmer freight next week.

In the Americas Suezmax market, a limited supply of local tonnage is forcing charterers to pull in from across the Atlantic, competing for the same ships that are in demand from the fiery West Africa market. With very limited VLCCs in sight for the current fixing window here also, expect further volatility and the market to push on even further than the dizzy heights of the WS550 paid for USG/TA.

North Sea

In contrast to the fireworks witnessed in other regions, the North Sea spent much of the week consolidating recent gains. The market opened with cross-UKC rates around WS430, owners benefiting from the substantial tightening seen over previous weeks. However, activity levels were relatively subdued throughout, with much of the support coming from strong external fundamentals rather than a flood of local cargoes. Despite the quieter atmosphere, owners never came under genuine pressure, largely thanks to robust returns available elsewhere and the continued absence of excess prompt tonnage. Consequently, rates only softened modestly, ending the week around WS410-420 for UKC business.

Crude Tanker Spot Rates (WS)

Clean Products

East

Publicly quoted stems have been quieter this week, as charterers attempt to cover off-market while owners continue to push rates north. If charterers have had the flex, shuffling internal programmes to cover with their own tonnage has been preferable. That said, there have been some big fixtures seen this week: an LR2 fixed at $11.0m for a west run, and WS520 for an LR1 heading east, very much a sign that there is still more to come. As with last week, both tonnage lists remain tight and sparsely supplied with safe ships. Expect another busy week ahead.

Another strong week in the AG saw rates climb sharply across the MRs, with TC12 reaching WS500 and TC17 pushing as high as WS650, as sustained enquiry, off-market activity and a tightening tonnage list kept owners firmly in control. LR strength provided further support, while prompt west-bound business ex Red Sea also proved increasingly difficult to cover.

Momentum began to ease towards the back end of the week, with TC17 softening slightly to WS635, though availability remains tight into mid-month and cargo flow continues to absorb incoming ballasters. With owners still confident and firm itineraries scarce, sentiment remains firm heading into next week, despite signs that the rapid upward move may be starting to level out.

UK Continent

With a seasonal shift in weather, we have seen a seasonal uptick in rates. A good spread of cargoes, both long and short, has seen owners be able to select the next strategic place to open and push rates. There has been constant chatter about a potential ULSD ban ex the States, but the end-of-week reality is more likely to see ULSD from the French strategic reserve going TA now to feed US demand. The market remains firm on almost all routes, and we expect this to continue.

It has been another positive week for the owning fraternity up in the north, as continued enquiry has resulted in further gains in freight. Med demand continues to flourish, with 30 × WS375 paid a few times, but this is also putting pressure on an already tightening tonnage list as vessels are exiting the region. XUKC has seen a few deals as well, some fixed under the radar, with levels closing at the 30 × WS365 mark. Potential for another push on rates here if enquiry persists.

Med

An active week for Med MRs, with rates sitting around the 37 × WS210 mark Med-TA. We continue to see volatility on other runs, especially with grade sensitivity, itinerary gambles, and replacements coming into play, hence why we have seen a spread on rates. Moreover, it is very much a position, grade, and options game at the moment, which leaves owners assessing cargoes on a case-by-case basis.

A firm week passes for Med handies, with last done sitting at 30 × WS340 levels XMed. A cagey start, with under-the-radar business adding to speculation on whether this market had legs or not. However, the bullishness felt in MR segments in the West, coupled with high numbers on cabotage business, meant the room was created for handy owners to challenge rates upwards. There remain a few stems outstanding which could potentially roll to next Monday — depending on cargo schedules — to put a lid on owners’ bullishness, where charterers will be hoping they are looking at a healthier list.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

This week saw rates steadily firming in both the UKC and the Med, as cargoes chipped away at early availability, mainly in the UKC. In the North, cargoes seemingly flowed from the off, with availability there to work; levels began to firm up first to WS305 and then soon after another 5 points to WS310. By close of play on Friday, rate ideas are around WS310-315, with owners next week looking to continue the gains, but only if enquiry picks up where it left off.

Down in the Mediterranean this week, we have seen a slightly slower week than previous weeks. However, despite this, top-line rates have firmed up from WS325 up to WS350 on Friday, following a seemingly new restriction at Taranto, which has allowed compliant owners to push rates upward to WS340. A forward cabotage cargo also entered the market, fetching a 10-point premium at a reported WS350. The list does still show availability, and on Monday we expect to see tonnage free to work in the next fixing window. A fresh test for a standard XMed run needs to be seen, where last done currently sits at WS330.

MR

Owners have little volume to work with this week, as full-stem enquiry has for the most part been quiet. However, we have seen a fresh test in both NWE and the Med. 45 × WS240 was tested but soon failed, setting a new benchmark to build from. There are currently a couple of naturally placed units that are expected to open up over the weekend that could keep these levels repeatable for now. Down in the Med, Monday saw a fresh test at 45 × WS250 ex Sines, leaving owners bullish on what could be in store. Unfortunately for them, full-stem enquiry rather dried up. We do expect to see tonnage open from around 6-10 October onwards, which could provide some options following the quiet end to the week.

Panamax

TD21 continues to strengthen, as owners firm up levels from around WS520 on Monday to TD21 printing at WS574 on Friday. Cargoes continue to flow in the region, but rates continue to climb in the midst of sky-high Aframax and Suezmax levels, which should give the Panamaxes room to run further, all things being equal. Over in Europe, the market still awaits a well-publicised fresh test. Tonnage has been clipped away for runs to TA, but as of yet, wider details are staying off-market. Owners here are in a unique position, where high Aframax rates should make Panamaxes the natural choice; however, owners need to be cautious of the MRs from below, which are currently capping rate ideas short. Owners are still in a position to ballast back TA and secure strong earnings off dates, which is creating a bit of a stand-off between charterers’ and owners’ ideas as things stand.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

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

wk on wk changeOct 1stSep 24thLast Month*FFA Q4
TD3C VLCC AG-China WS-131,1451,1586771,030
TD3C VLCC AG-China TCE $/day-15,5001,277,0001,292,500737,5001,133,750
TD20 Suezmax WAF-UKC WS293728435215591
TD20 Suezmax WAF-UKC TCE $/day187,250429,250242,000101,750333,250
TD25 Aframax USG-UKC WS172729558234695
TD25 Aframax USG-UKC TCE $/day65,000240,250175,25054,000220,000
TC1 LR2 AG-Japan WS52928876566 
TC1 LR2 AG-Japan TCE $/day16,750281,750265,000162,000
TC18 MR USG-Brazil WS168467299298308
TC18 MR USG-Brazil TCE $/day30,50065,75035,25036,00033,750
TC5 LR1 AG-Japan WS61951890622812
TC5 LR1 AG-Japan TCE $/day14,250208,500194,250129,250170,500
TC7 MR Singapore-EC Aus WS63536473338327
TC7 MR Singapore-EC Aus TCE $/day28,25088,25060,00037,50052,500

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

Bunker Prices ($/tonne)

wk on wk changeOct 1stSep 24thLast Month*
Rotterdam VLSFO  -9666674694
Fujairah VLSFO  -21952972854
Singapore VLSFO  -22824847820
Rotterdam LSMGO  -3213611,3931,346

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