Too Much or Too Little?

2023 has seen a notable increase in new tanker ordering activity and as the year slowly draws to its end, it is perhaps time to reflect on where investment in new tonnage has been the strongest and where it is still lacking. 

For the year to date, ordering activity has been the strongest in the Aframax/LR2 segment, with the focus largely on coated tonnage. Here, circa 80 fresh orders have been placed, with the attractiveness of this asset class being fuelled by very robust spot tanker earnings, particularly in the Aframax segment. Aframax spot TCE earnings outperformed larger crude tanker categories both in 2022 and so far in 2023, driven by significant structural increases in tanker tonne miles amid Russian sanctions and a significant portion of ageing tonnage migrating into solely Russian trade. A degree of confidence in this size group has also been offered by the fact that close to 440 vessels in the existing Aframax/LR2 fleet are 15 years or older. With so many ageing tankers in this size, the volume of ordering activity to date is certainly looking modest in comparison.

Investment has also been robust in the Handy/MR and Suezmax categories. For the Handy/MRs, orders for tankers between 42 to 57,000 dwt (MRs) have amounted to just over 90 units to date, whilst we have also seen a modest (yet very rare in recent years!) re-emergence in orders for 30 to 42,000 dwt (Handy) tankers, with 16 orders placed. Yet again, whilst investment in this size group is already at its highest level in a decade, this has to be considered in the context of the ageing fleet, where we count just over 940 units built in 2008 or earlier and 288 tankers built in 2002 or earlier.  The picture is somewhat more balanced for Suezmaxes, where ordering activity to date stands at 55 vessels, which compares to 204 units at 15+ years of age.

For the LR1/Panamaxes and VLCCs, where investment in new tankers has been restricted, the gap between orders and ageing tankers is even more stark. For the year to date, 20 confirmed LR1 orders have been placed (and no Panamax orders). Whilst these orders mark the first investment in this size group since 2018, these numbers are far too insufficient to offset 245 tankers in this segment aged at 15+. Despite the larger fleet size, VLCC orders for the year to date also stand at just 20 units, whilst 264 tankers in this category are at 15 years of age or older. However, it is worth bearing in mind that VLCCs (and Suezmaxes to an extent) have the largest share of tankers already absent from the mainstream market, with many units either trading sanctioned barrels (Iranian or Venezuelan crude before temporary sanctions relief) or are engaging in permanent storage.

The trend is similar if we consider total tanker orderbook vs. the fleet at 15+ years of age shown on the chart below, which clearly shows that whilst increases in ordering activity are welcome, it comes nowhere close to offsetting the growing mountain of ageing tonnage. This has not been a problem recently, however, due to a rapid pull of ageing tankers into Russian and sanctioned trades. Nonetheless, this alternative demand cannot continue growing forever and will be saturated at some point. When that happens, the normal drivers of tanker demolition will return, being reinforced by ever increasing regulatory pressure. Yet, if demand remains there, it may prove more economical for owners to upgrade their existing tonnage rather than invest into new tonnage.

Tanker Orderbook vs Tanker Supply 15+ Years

Crude Oil

Middle East

It’s been a quieter week than expected on the VLCCs as Charterers were drip feeding cargoes into the market and the mood was not helped with the announcement of the new OPEC deal that pledged to cut 2.2 million bpd for the first quarter of 2023 . Despite this negative news, rates only dipped a little under last done as owners continued to show resistance and there was plenty of COA liftings of middle decade cargoes which impacted the tonnage supply for earlier dates. In today’s market we are calling a 270,000mt AG/China run at ws 66 and a 280,000mt AG/USG run at ws 35.

Suezmax rates are steady in the AG and Charterers will struggle to break below 140,000mt x ws 67.5 next week. Rates heading East are approximately 130,000mt x ws 120 today and the number of vessels willing to head East has fallen away a little, which should help keep the rate propped up.

There remains a willingness from Owners to head West with discounted rates easier to come by compared to eastbound runs. Sentiment has remained flat throughout the week with little change expected in the near term as we enter December. The week concludes with AG/East at the ws 185 level.

West Africa

It was a very muted week for VLCC’s in the WAF zone with Charterers showing little urgency in covering last decade stems. There continues to be a large volume of Eastern ships heading to Cape so it is hard to see any upturn in the short term and owners are fairly content that levels have stayed in the high ws 60’s despite the lack of demand. In today’s market we are expecting a WAF/China run to fix at the ws 67 level.

Suezmax markets in West Africa have also begun to steady, and going into next week TD20 is likely to push above 130,000mt x 97.5, and to head East premiums are around 10 ws points. Despite firming sentiment this mainly applies to those loading in Nigeria with the list of willing candidates thinning out.


The market in the Med is under some pressure with delayed loadings for CPC pushing the flow down the line, for TD6 today we think Charterers will be looking to break 135,000mt x ws 137.5. Cargoes heading East from Libya today will be approximately $5.0M.

For the Aframax sector, the week started off busy, with a lot of tonnage being cleared off the front end of the list. However, the second half of the week was quite different, with limited activity for Owners looking to cover their vessels. CPC cargoes received a good amount of offers and rates remained steady at around the ws 190 levels for CPC/Augusta. Cross Med softened throughout starting at ws 160 and then dropping to ws 145 levels. While it’s believed that rates are starting to bottom out, next week will be a test of Owners’ resolve if we see a similar amount of activity in the market.

US Gulf/Latin America

The expected rush after Thanksgiving in USG did not materialise so rates have started to soften as the end of December cargoes were thin on the ground. Most of the movement has been from Brazil where there has been a notable increase in volume of export cargoes and we have also seen the re-emergence of Venezuela lifting with the temporary liftings of sanctions. We expect  a USG/China run will fix in the region of just  $9.95M in today’s market while a Brazil/China run is paying around the ws 65 level.

North Sea

There hasn’t been much activity in the North Sea market this week, as nothing noteworthy has happened other than the weather. It seems like the rates are bottoming at ws 145 levels, and due to the disruptions caused by the December festivities, another week of inactivity is anticipated. We predict that rates will begin to recover in mid-December for X-North Sea.

Crude Tanker Spot Rates (WS)

Clean Products


It was a pretty tough week for Owners of both LR2s and LR1s. With limited cargoes appearing on the open market as Charterers prefer to pick off Owners on direct deals. TC1 was tested down to 75,000mt x ws 107.5 and Jet cargoes heading West at $3.2 million indicates the pressure felt by Owners. The LR1s have suffered on the lack of long haul stems as the majority of cargoes have been short meaning ships are staying on the list albeit moving a little bit further down. Jet cargoes going West are assessed at $2.7 million and TC5 is at the 55,000mt x ws 120 mark also showing the negative test that Owners have been under this week. Fundamentally on both sizes we are missing volume. Owners will be hoping that December brings a little Christmas cheer! (And preferably during the first week of December!).

This week has seen the MRs East of Suez pick up a pace not seen since pre Bahri week with a good number of prompt and ballast units on subs as well as Singapore showing signs of tightening there is now a collectively stronger feel to the region. One stem from Duqm has seen inflated numbers off early dates but those cargoes surfacing in the natural window can expect to see a cap on the amount of movement seen on the MRs for now as the softer feel on the LRs continues. In short, with another 1-2 days of busy activity in this market and we are likely to see things turn, however for now the feeling is we are at the bottom.

It was a big reversal this week in the Far East for the MRs. After few weeks of tonnage clearance, demand is returning to normal levels and the market is finally gaining some momentum. The benchmark South Korea/Spore and TC7 run is likely to see around $100k and 20 ws points up in one week. The market remained busy at the end of the week and the hope is that the current sentiment will surely roll over to next week.


All in all it’s been a steady week in this Med handy market with X-Med rates trading flat at the 30,000mt x ws 265 mark. Average enquiry levels over the course of the week has allowed rates to hold as well as delays across the Med keeping the list well-balanced. Black Sea action has been slow with rates expected to land at +30 ws points when next tested. A quiet finish into the weekend.

Finally to the MR’s down in the Mediterranean where it has been an active week with rates managing to push up. We began the week with Med/TA trading at the 37,000mt x ws 200 mark but with a good level of enquiry helping to tighten the list, combined with an improving TC2 sector it wasn’t long until rates started to push. Fast-forward to Friday and we see 37,000mt x ws 225 on subs for Med/TA with WAF expected to land at around +20 ws points when next tested. Little currently remains to cover but with the list tight, Owners remain bullish.

UK Continent 

MR Owners stepped into this week with some real air of positivity off the back of a good run up to Thanksgiving in the States leaving us very few incoming ballasters. After a sluggish start, the cargoes flowed and with that some testing saw TC2 push quickly up to 37,000mt x ws 220 and the abundance of WAF stems which have been not preferred by many held a 20-30 point premium. Charterers did seem to pump the brakes a little in this second half of the week, but expect a few quiet words to be had directly in an attempt to let some steam out of this market. Pushing into next week, despite this slower end, we anticipate Owners to remain in a strong position with the continued lack of ballast tonnage, and expect a few deals to be done over a mulled wine with the upcoming London Christmas party week.

It has been a positive week for Handies in the North as the combination of steady enquiry and a tonnage list which is lacking supply has seen levels firm. A good amount of vessels were either fixed or ballasted down to the Med which has created a shortage in the tonnage list. X-UKC closes at 30,000mt x ws 190-192.5 with Charterers hopeful that the weekend break presents a few more firmer vessels come Monday.

Clean Tanker Spot Rates (WS)

Dirty Products


The Northern market initially faced downward pressure, and a negative correction was seen after one Owner took the hit at ws 300. With rumours of below ws 300 already on subs, there is still enough tonnage showing to see a further decline in levels should enquiry continue to persist early next week.

A slower week in the Med saw Owners succumb to negative pressure as we witnessed a drop in levels to ws 275. After a 30-point drop landed, the same Charterers went to market again for a similar run, capitalizing on current sentiment and managing to fix at ws 270. Despite initial weakening sentiment, the back end of the week saw a handful of Owners go on subs, which have now bottomed rates out. If replenishment is kept to a minimum over the weekend, Owners will want no less than last done upon the next test.


The MRs in the Mediterranean and the Continent experienced a lack of full stem enquiry throughout the week. However, the welcome backstop of part cargo coverage has allowed MRs to take advantage of their flexibility. Despite the softening of levels seen on the handies, it may have lowered Owners’ confidence. Nevertheless, certain Owners remain optimistic as the current availability in both regions may not experience a significant drop upon the next test. The current trend of the MRs riding the coattails of the handies is expected to continue until there is a pickup in 45kt activity.


Panamaxs this week are left second-guessing where their correct value should be, as numbers are being dictated by the surrounding Afras, which have seen a significant decrease in value across Europe/TA moves. Last done on the Afras ‘prorating’ from the Med is in the ws 120s, this gives us an idea of what Panamaxs will need to be mindful of to stay competitive.

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 30thNov 23rdLast Month*FFA Q4
TD3C VLCC AG-China WS+167667263
TD3C VLCC AG-China TCE $/day+3,25048,50045,25053,00043,750
TD20 Suezmax WAF-UKC WS-199100161109
TD20 Suezmax WAF-UKC TCE $/day-1,00038,50039,50081,25046,250
TD25 Aframax USG-UKC WS-3177180259196
TD25 Aframax USG-UKC TCE $/day-1,75045,50047,25078,50053,500
TC1 LR2 AG-Japan WS-21113134146
TC1 LR2 AG-Japan TCE $/day-7,00019,50026,50031,250
TC18 MR USG-Brazil WS+9357336197247
TC18 MR USG-Brazil TCE $/day+3,75059,25055,50024,50035,500
TC5 LR1 AG-Japan WS-7119126155149
TC5 LR1 AG-Japan TCE $/day-1,00013,75014,75023,00022,750
TC7 MR Singapore-EC Aus WS+14177163185200
TC7 MR Singapore-EC Aus TCE $/day+3,75016,00012,25016,75020,750

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

Bunker Price s ($/tonne)

wk on wk changeNov 30thNov 23rdLast Month*
Rotterdam VLSFO  +9579570585
Fujairah VLSFO  +0651651681
Singapore VLSFO  -33648681687
Rotterdam LSMGO  +10806796857

Print the report