Venezuela Reset

If anyone expected 2026 to be less eventful than 2025, the first weekend of the year has swiftly proved them wrong. On January 3rd, the US announced that Venezuelan President Nicolás Maduro and his wife had been captured and taken into US custody.

As the week progressed, a new interim president was sworn in, three more sanctioned vessels were seized by the US, including one tanker flying the Russian flag. Venezuela’s interim government has agreed to “hand over” 30-50 million bbls of crude to the US, with the initial barrels being “backed up stored oil”. Whilst a maritime blockade remains in place, US officials swiftly stated that all further Venezuelan production will be sold by the US at market price, whilst the US will supply naphtha diluent to Venezuela to enhance crude production. Pledges have been made that the US will aim to stabilise and grow Venezuelan output as soon as possible, which suggests a sanctions rollback. The US government appears to be actively engaging with oil companies, traders, financial institutions and the private sector to put things in motion: news emerged yesterday that a major trader has received a preliminary special license from the US government to begin negotiations to import and export oil from Venezuela for 18 months.

For now, however, Venezuela remains in a fragile and unstable condition. Despite the change at the top, the government structure remains largely intact, with the same Venezuelan socialist principles. Externally, the newly sworn president has sent mixed signals. On one hand, Rodríguez has insisted that Nicolás Maduro remains the legitimate president; on the other, she is collaborating with the Trump administration. There is great internal instability, with multiple armed actors, including paramilitary groups and criminal gangs, with varying degrees of autonomy.

On production, the situation on the ground is also dire. Decades of mismanagement and infrastructure decay reduced the country’s production to just 1.1 mbd last year, from a peak of 3.5 mbd in 1997. As such, the short-term production outlook remains challenging, although small increases are possible if bottlenecks are eased and quick fixes implemented. Over the longer term, if political stability and a safer operating environment can be achieved, production growth could be substantial, although analyst estimates vary widely. US oil companies may be encouraged to invest if a rapid return and large capital deployment is linked to compensation for assets expropriated in the early 2000s.

In the nearer term, crude flows are likely to change direction rather than rebound strongly. More Venezuelan barrels are expected to be redirected into the US and crude flows to Europe could resume, particularly Italy and Spain, as well as to India. Legitimate flows to China are also a possibility but there is a lack of clarity at this stage considering the wider politics involved. At the same time, the US is expected to restart clean product shipments into Venezuela, which largely stopped in the second half of 2025. All of this will support demand for mainstream tonnage at the expense of dark/sanctioned ships. Aframaxes will be the key beneficiaries, as they are the main workhorse on the existing Venezuela/US trade. Exports to Europe would mainly use Aframaxes and Suezmaxes, while any legitimate flows to Asia would move on VLCCs.

The picture is different for dark/sanctioned tankers. Chinese independents are highly exposed to a loss of sanctioned Venezuelan crude and would likely switch to discounted Iranian or Russian barrels, where possible. Still, there is a question mark whether Iran/Russia can fully offset the loss of the Venezuela’s supply and some incremental demand for mainstream crude here could not be ruled out, both from the Middle East and Canada’s TMX. The risk of further seizures of sanctioned vessels by the US has also increased, particularly in the western hemisphere.

Greater clarity should emerge over the coming days and weeks. At a macro level, however, one thing already appears clear: coercive statecraft is back, with major implications not just for the Americas but for the world. For tanker markets, this adds another layer of geopolitical risk and points to increased freight volatility, with oil flows increasingly driven by political decisions and not by pure economics.

Venezuela Crude Production (kbd)

Crude Oil

East

An interesting week in the AG VLCC market this week as participants returned from the holiday period. As we began a fresh week on the surface enquiry was on the slower side but that soon changed and we saw a steady flow of cargoes working both on the surface and quietly in private, which led to several ships being reported on subs. The tonnage list began the week healthy supported by a decent number of ballasters, which initial limited the upside. That said, the tables have turned and freight levels have improved, and the tonnage list has shortened. As the week progressed, sentiment improved, driven by charterers stepping in to cover third-decade stems through a mix of market quotes and private cargoes. Overall activity was healthier than initially expected, and owners began to show greater resistance to fixing at last done levels, keeping the tone firm.

AG Suezmax sentiment is once again firming heading into next week, driven largely by developments in the VLCC sector. Broader global political uncertainty continues to inject bullish sentiment into the market, with participants mindful that conditions can change rapidly. Suezmax enquiry in the AG has predominantly focused on short-haul eastbound business, limiting immediate list turnover. However, with improving returns elsewhere, particularly in WAF, there is growing potential for vessels to reposition westward. Should this materialise, it could lend further support to AG rates while simultaneously tightening tonnage in WAF, reinforcing the bullish outlook across both regions.

In Aframaxes in the Indo region, under radar fixing helped clean up the list, with sentiment improving as rates appeared to find a floor. A handful of regional stems and steady northbound demand continue to support ton-mile, and this should allow owners to exert upward pressure for third-decade requirements. Similarly, rates ex-NWOZ are tracking on the same upward trajectory, as a firmer LR2 market will largely remove competition for condensate stems. With fundamentals strengthening, charterers are expected to move early and quietly again next week to avoid inflating rates too quickly. We close the week assessing Indo/Up at 80kt × WS142.5.

West Africa

The WAF VLCC market resumed quietly following the holiday break, with little visible activity reported at the start of the week. Several vessels were noted on subs without further detail, suggesting some underlying flow of cargoes being concluded away from the market. Early in the week, downward pressure persisted amid limited enquiry, though owners remained hopeful that freight levels were approaching a floor. As the week progressed, activity began to pick up under the radar, with tonnage gradually being absorbed from the list. Toward the latter part of the week, a handful of VLCC cargoes were seen working ex-WAF, tightening the front end of the tonnage list. Freight levels showed signs of improvement and followed the firmer tone in the AG, helping to stabilise sentiment. Overall, the week closed with rates holding firm and owners in a more confident position.

The WAF Suezmax market began the week on a subdued footing, with limited early momentum. However, sentiment quickly shifted mid-week following underlying geopolitical developments linked to Venezuela, which filtered through the wider Atlantic basin. Strength in the VLCC market across the US Gulf and WAF quickly fed into Suezmax sentiment, tightening tonnage availability and pushing rates higher. By Thursday, activity notably increased, with a busier trading day seeing multiple ballasters from the East placed on subjects. This influx of enquiry, combined with repositioning interest, further reduced available prompt tonnage. As the week closes, the WAF list remains tight, with geopolitics continuing to play a key role in shaping sentiment. Owners are increasingly confident, and the underlying fundamentals point toward continued firmness in the near term.

Mediterranean

Mediterranean Suezmax activity remains uneven, with enquiry levels still staggered. Several CPC stem cancellations have disrupted market momentum, leading to a slower pace of fixing in the prompt window. Despite this, broader basin strength is beginning to influence sentiment. With WAF and US markets firming, several Mediterranean-positioned vessels have opted to ballast toward those regions, gradually tightening the local list. Looking ahead to early February loading dates, when additional CPC stems are expected to emerge, availability appears increasingly constrained. This tightening is likely to place upward pressure on rates, particularly if external markets remain supportive.

The festive period has come to an end, and Aframax owners have taken stock. The week began with the market looking fragile as a build-up of holiday tonnage has a bearing on sentiment. There was a correction last week into the WS150s for Ceyhan voyages and this theme continued with WS150 being concluded a couple of times. Libya loaders did find premiums paying in the WS160s but in general there were mitigating factors such as shorter flats, age restrictions or vessel history restrictions. By the close after some fixing the outlook is beginning to look much more positive for owners as bad weather looks to thin out an already tight firm position list and with a WS175 concluded from Libya there is a feeling of more to come next week.

US Gulf/Latin America

Like the rest of the Atlantic, the Americas market began the week with limited visible enquiry on the surface. Despite this, several vessels were reported on subs without further details, indicating some underlying activity taking place away from the open market. Freight levels initially remained under pressure, tracking the softer tone seen across surrounding regions. The market opened cautiously due to Venezuela’s situation combined with muted Suezmax enquiry continuing to weigh on overall sentiment. Rates remained broadly steady through the early part of the week as charterers waiting. As the week progressed, a small number of cargoes start to outstanding, and uncertainty persisted. However, freight levels began to creep higher, supported by a tightening tonnage list. Toward the end of the week, rumours of increased overnight activity emerged, with charterers continuing to cover February requirements. This shift left owners in a stronger position, with resistance building and momentum starting to improve into the close as the rate get firmer and firmer.

North Sea

On Aframaxes in the North, after a bit of tooing and froing over 25 v 26 flat rates rates have settled at WS147.5 basis flats. Storms coming in across Europe have seen delays in ports which will have somewhat of a knock-on effect into next week. Most have tucked their relets into programmes where they can and despite the weather warnings, we see a stable market going into Monday. The appetite for the States seems two-fold, some holding optimism for local and others eyeing up the double laden if they can time their Atlantic crossing. Still good units on the early side of the list as we go into the weekend.

Crude Tanker Spot Rates (WS)

Clean Products

East

Very busy week across the LRs in the AG, taps have been turned on, and charterers have hit 2026 with gusto. Positive rate correction seen on both LR2 and LR1s with TC1 up to 75 x WS182.5 levels and West (via Cape) at $4.3m, TC5 on subs at 55 x WS190 but pushing WS195 next with $3.3m for West via cape. Although not a huge number of stems open heading into the weekend enquiry is high and this push doesn’t feel to be easing.

The AG MR market opened this week with momentum continuing from the previous week with several ships on subs and a healthy number of cargoes outstanding. Attention quickly turned to fresh lists as Singapore openers began ballasting toward the AG and midweek saw a fresh test for AG/UKC at $2.55m  for a Jet run via the Cape. TC17 remained around ws245–250 and TC12 around ws185–190 on broadly balanced lists. A slowdown in enquiry then weighed on sentiment, with TC17 correcting lower after 35 x ws245 (25) fixed ex Duqm, dragging vanilla TC17 and X-AG levels down. As the market transitioned to 2026 flat rates, all routes softened marginally despite an active fixing week, with limited remaining cargo capping the upside. We close the week, with rates having dipped further on sluggish enquiry. However, with an overnight pickup in cargoes, particularly TC12 requirements, alongside firmer sentiment from Singapore and the LR sector, we see tentative support into the close and potential upside in rates for next week.

UK Continent

The main drivers this week have been weather, replacements, and a roaring USG market. Rates on most routes have edged up with a replacement WAF stem being of notable increase at 37 x WS170. Most owners are now running Atlantic econs basis tc2/tc14 round trip earnings, hence why we have seen WAF and Brazil rates push up. TA runs are still the most desirable, but we haven’t seen much of a push on this route as it is still firmly in backhaul territory. That said TA runs are likely to be drawn up by other routes and earnings and a slightly tighter list. We expect rates will probably rise to WS120 TA, WS165 to WAF and WS170 to Brazil. Itineraries seem to be the only reliable feature here, pinning a good one down remains tricky.    

Not the most thrilling week to kick off the year for Handies plying their trade in the UKC. On Monday freight adjusted to 2026 flat rates with 30 x WS152.5 paid and as the week rolled on TC23 has traded sideways at 30 x WS150. MED demand has also been there but there have been enough candidates around to gobble up this business at the 30 x WS140-145 level. Bad weather is throwing some vessels itineraries up in the air, but the weekend break has come at a good time to counteract this. There is some positivity around in the MR market so Handy owners are hopeful this can have a domino effect down.

Med 

A tale of two halves for MRs in the Med this week. We started relatively flat but with the bad weather throughout and TC14 firming owners sensed the tide was changing after 37 x WS140 went on subs for a Sines-UKC run. Owners remain positive here and won’t be feeling much pressure with enquiry trickling through and even with TC14 correcting down by the end of the week. USG loads remain a draw for any ballast tonnage, thus any MRs in the Med are in optimal position to take advantage of this positive pressure going into next week, 37 x WS130 Med-TA and positive. Med-WAF has seen a pickup throughout the week but requires a fresh test to see if rates are in line with Med-TA.

Handy owners will be closing the week feeling more positive on rates compared to the start as we saw rates correct down to a low of 30 x WS152.5. Minimal enquiry and a long list were the drivers for this, however, with less than desirable weather questioning itineraries it seems current fixing levels around the WS155 mark will start to feel the pressure going into next week. Nonetheless, further enquiry is needed to make this a feasible variable and to counter the downward pressure that has plagued Med Handies this week. Two elements to look out for are: Should any replacements happen, will owners use this to retort charterers gains? And if so, will charterers start to stagger their enquiry to avoid letting owners build any form of momentum going forward?

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

Handies in the North have seen a rather quiet week as their big cousins the MRs have taken most of the enquires. Despite this, levels have managed hold relatively steady for now between the WS245-247.5 mark this week. Bad weather in the Bay of Biscay has left potential options somewhat uncertain which has helped to support current rates. As we look to next week, we expect to see bad weather continue to cause delays with owners looking to take advantage of slipping itineraries if called upon.

The Med has seen an overall lacklustre week, as the first full week back after the New year has a lethargic feel. The list looked lengthy come Monday with enquiry struggling to surface, it wasn’t long before levels suffered as a result. WS235 was tested but failed before WS230 was tested and fixed a handful of times setting the new benchmark. We expect to see some adverse weather conditions in the med next week which like in the UKC, could play into owners’ hands.

MR

MRs in the North saw a good level of enquiry off the back of an unusual amount of naturally placed, workable tonnage in the region which charterers were quick to snap up. Levels varied as charterers fixed cargoes ex-UKC mostly down to the Med softening levels to between the WS170-175 mark. This activity has now cleared units from the list and steadied up sentiment and rates. In the Med, enquiry has struggled to surface leaving some units to work their way up the list but for now rate ideas hold at the WS180 level as we head into next week.

Panamax

TD21 has seen a rather subdued week compared to weeks previous but levels have held at the WS235-240 mark as under-the-radar fixing keeps the list ticking over. Owners in the region are hoping for a trickle-down effect should surrounding markets soon see the benefit of extra flow of cargoes from Venezuela which could cause rates to climb further but this is yet to be seen. Over int the UKC tonnage has been tight this week, and Ideas for UKC-USG runs currently sit around the WS130 mark.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

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

wk on wk changeJan 8thDec 23rdLast Month*FFA Q1
TD3C VLCC AG-China WS-1747512387
TD3C VLCC AG-China TCE $/day-2,25059,50061,750125,25070,250
TD20 Suezmax WAF-UKC WS-32128160133122
TD20 Suezmax WAF-UKC TCE $/day-20,00058,25078,25063,25049,500
TD25 Aframax USG-UKC WS-5221226202196
TD25 Aframax USG-UKC TCE $/day-75060,50061,25056,50046,250
TC1 LR2 AG-Japan WS33181148159 
TC1 LR2 AG-Japan TCE $/day10,75045,75035,00041,750
TC18 MR USG-Brazil WS52233181230183
TC18 MR USG-Brazil TCE $/day9,50030,75021,25032,50019,750
TC5 LR1 AG-Japan WS26191165181180
TC5 LR1 AG-Japan TCE $/day5,75034,25028,50034,50029,750
TC7 MR Singapore-EC Aus WS8234226242207
TC7 MR Singapore-EC Aus TCE $/day028,50028,50032,00023,000

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

Bunker Prices ($/tonne)

wk on wk changeJan 8thDec 23rdLast Month*
Rotterdam VLSFO  -1416417412
Fujairah VLSFO  -8419427429
Singapore VLSFO  -9421430434
Rotterdam LSMGO  +2612610635

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