What’s Steering Aframax Demand?

The fortunes of the Aframax market in recent years have been largely driven by a surge in crude tonne-mile demand following the onset of the Russia-Ukraine war. The rapid expansion of the dark fleet servicing Russian trade has further supported the market. Looking ahead, increasingly stringent Western sanctions, combined with broader geopolitical tensions will remain key forces shaping the sector’s outlook. However, reconciling the many fast-moving developments, including tanker sanctions, the EU’s 18th sanctions package, Trump’s punitive tariffs on India for purchasing Russian crude, secondary sanctions on other countries, and The President’s latest comments on progress in talks with Moscow, remains a significant challenge.

First, this year has seen a tsunami of sanctions targeting tankers, with tonnage in the 80,000 to 125,000 dwt range being the most heavily impacted. As of now, 25% of the global Aframax/LR2 fleet is sanctioned, with another 7% at risk due to questionable trading activity. Although this (coupled with Urals prices regularly falling below the price cap) initially prompted an increase in mainstream Aframaxes engaging in Russian trade, the EU’s new oil price cap is likely to push mainstream players back into the conventional market. Yesterday’s US imposition of additional tariffs on India goes even further. India has imported circa 1.6 mbd of Russian crude this year, and Russia will struggle to find an alternative home for all this volume if India chooses to side with the US. For now, India’s path forward is unclear, although Indian refiners have already been seen increasing their purchases of Atlantic Basin and Middle Eastern barrels. Russian exports and hence Aframax/LR2 demand, both for the mainstream and dark tankers, are under further threat due to US secondary sanctions on other countries. That said, in such a scenario, traditional buyers of Russian crude are likely to seek alternative barrels from the Middle East or the Atlantic Basin, with the incremental demand expected to primarily benefit larger VLCCs and Suezmaxes. Another layer of complexity comes from the possibility that the US may soften its stance if targeted buyers of Russian barrels substantially alter their purchase practices, or more importantly, if an elusive Russia-Ukraine peace agreement is reached.

In the mainstream market, Aframax demand prospects are mixed but more straightforward. CPC crude exports rose sharply in early 2025, though gains mainly benefitted Suezmaxes. Caspian production is expected to plateau in the near term and decline thereafter. By contrast, Aframax trade out of Libya continues to strengthen, recently hitting a 12-year high amid the return of international firms and reopened fields. Export levels could remain elevated but that depends on political stability. The biggest uncertainty remains the restart of Kurdish crude flows via Ceyhan, which was announced multiple times since 2023, but still not realised.

In the North Sea, Aframax exports may see modest short-term gains on the back of rising Norwegian output. However, a structural decline is expected, with European crude production projected to fall by over 0.5 mbd between 2026 and 2030.

In the Atlantic, Aframax flows from the US to Europe remain resilient despite a broader slump in US exports caused by lower oil prices and peak summer refining. This trade is likely to stay supported, as European refiners continue to favour US barrels despite ongoing refinery closures, whilst import requirements will be maintained once domestic output starts to decline.

The picture is different for Aframaxes into the US Gulf, where volumes have fallen due to lower Mexican exports and the suspension of Venezuelan flows to the US in May, following the Trump administration’s decision to revoke export permits. A recent restoration of Chevron’s license will offset most of the damage, but Mexican flows remain under pressure due to falling output and rising runs at the new Olmeca refinery. Meanwhile, Aframax exports from Argentina are also expected to decline, as the expanded Puerto Rosales terminal can now accommodate Suezmaxes.

Elsewhere, TMX crude exports from Vancouver have risen steadily since the pipeline’s 2024 expansion, averaging 450kbd in Q2 2025 — nearly 100kbd above Q3 2024 levels. The share of direct Aframax shipments to China has nearly doubled during this period, driven by the escalating US-China tariff war. These trends are expected to continue as Canada pushes to diversify export routes and maximise TMX throughput. At the same time, California is set to lose 17% of its refining capacity, with Phillips 66’s 139kbd Wilmington refinery closing later this year, and Valero’s 145kbd Benicia plant shutting by April 2026.

Ultimately, the outlook for Aframax demand remains closely tied to how Russia-linked geopolitics evolve. Beyond Russia-related factors, the wider crude tanker market could receive a tailwind later this year from increasing OPEC+ production. Middle East exports, limited for now by increased crude burn during summer and strong refining runs, are expected to rise in Q4 primarily supporting VLCCs, but also improving Aframax and Suezmax economics out of the US Gulf and West Africa, with spillover into more distant markets. Looking further ahead, other structural factors are coming into play, most notably the decline in crude production across several key Aframax markets.

Changes in India’s Crude Imports – 2025 vs. 2018 (mbd)

Crude Oil

East

It’s been an exceptionally busy week in the AG VLCC market, with charterers stepping out on top of each other trying to secure coverage for the end August position. As activity picked up and sentiment turned firmer, rates responded accordingly and began to push upwards. Since the end of last week, TD3 rates have now risen by over WS10 points, and the market anticipates further gains next week. The tonnage list remains challenging to navigate, as owners continue to show resistance against charterers’ attempts to fix at last-done levels. With around 40 cargoes already quoted for the end of the month, owners will be hoping that enquiry continues at pace when the market reopens on Monday. Today we are calling AG/China in the region of WS56.

For Basrah/West today, Suezmax rates are firm. With a dramatically improved market in the West this week, owners will look to push above 140 x WS55 via C/C next week with the option to ballast to Cape looking increasingly attractive. Rates to head East remain untested, but against a firmer VLCC market they are certain to improve going into next week. Owners will look to push above 130 x WS105.

In Asia, some optimism crept into the Aframax market towards the end of the week’s close, as a busier AG region pulled tonnage away and some off market activity help trim the list further. A firm LR2 market has also cleaned up the list, where some dirty owners were willing condy cargoes as they exit the DPP trade for now. However, the Indo list remains ample for the natural fixing window as dates now have moved into third decade. Two Thai-bound requirements surfaced late in the week, where owners will look to repeat last-done levels. Sentiment sideways for now as we assess Indo/Oz at 80 x WS105.

West Africa

VLCC activity in West Africa was slow to surface this week, with much of the business done quietly and under the radar. As the week progressed, however, rates began to show signs of improvement which was supported by firmer activity in surrounding regions and a handful of discreet VLCC fixtures. Suezmax rates also saw a gradual uptick, beginning to encroach on VLCC territory, which took a couple of ships out of action. Looking ahead to next week, market sentiment remains firm, and with the tonnage list tightening, charterers may find themselves with fewer options. Today we are calling WAF/East in the region of WS55.

Suezmax markets in West Africa are firm. For TD20 today, we estimate rates to be around WS130.  Tonnage for end-month dates remains very tight and charterers will be hoping for more itineraries in the Med to firm up over the weekend to relieve the pressure next week.

Mediterranean

Although the Aframax lists this week have seen tonnage availability here in Europe remain relatively tight, we currently face liquidity issues on cargo supply, with only North Africa providing much source of employment in Med. Slim pickings then for those opting to stay and operate this side of the Atlantic, with rates ever so slightly softening below WS150 for a benchmark Ceyhan run. Sentiment in Europe did however receive a much welcomed boost, where a significant combined count of UKC + Med ships opted to try take advantage of the returns available on a TD25 run. Although at time of writing the US has dropped some WS30 points from its peak, the markets have been given a reminder of what volatility looks like, awakening us all from a summery slumber and possibly providing an air of optimism among owners for Q4, especially where surrounding larger markets now also trade up.

TD6 remains firm this week with WS130 paid, albeit on a replacement. Still, with a firm West Africa market, owners will likely look to hold onto these levels. Libya/East remains untested, although we estimate around $4.8m; yet, with a limited number of ships willing to go East at the moment, this could easily push up after a few ships are put on subjects.

US Gulf/Latin America

VLCC activity in the US Gulf was slow to emerge, with charterers drip-feeding cargoes into the market to manage the pace. Despite limited volume of enquiry, fixtures concluded showed a steady rise in rates, helping to support firmer sentiment. Meanwhile, the Brazil export market experienced a relatively active week, with improving levels further highlighting the underlying strength in the region. Today we are calling USG/China at $7.2m and Brazil/East at WS54.

Aframax rates in the region quickly fell off this week, last done at WS150 (minu WS35 from the week prior) for TD25; rate are stabilizing now but another quiet week of inquiry could see this drop further.

Suezmaxes took an uptick on the back of a tighter WAF market, rising nominally some WS15-20 points, with room for a little more firming.

North Sea

A bit of a damp squib of a week with the standard under the radar fixing and flat trading for Aframaxes in the North Sea. Little to upset the apple cart but still decent returns considering the time of year.

Crude Tanker Spot Rates (WS)

Clean Products

East

A generally positive week again on the LRs, with lists remaining tight and fairly prompt enquiry driving rate rises. LR1s have pushed the most, with TC5 moving from WS150 upto WS177.5 as of now. West runs have been less frequent but rates have still pushed to $3.3m for 60,000 mt Jet AG/UKC. Shorthauls though have kept the pressure on the list for now, with X-AG rising some $150K. 

LR2s have been quieter, however, although rates initially saw this week WS150 on TC1 established, a little more pressure has come to bear. The RSea has seen LR2 rates push up some $300K on where last week ended, though with 90,000 mt Ulsd Yanbu/UKC now at $2.85m. Yet, overall we have seen activity die away at the end of the week on both sizes as the last decade looks better supplied, with tonnage and charterers are taking a pause to try and cool things off a touch. We are likely to see upto 10% taken off routes unless Monday starts with a burst.

All in all, it’s been an active week for the MRs in the AG/RSea region, with consistent enquiry levels throughout. This has been matched by a good supply of tonnage and as a result rates have traded flat for the most part of the week. TC17 has been trading around the 35 x WS250 mark, with TC12 at 35 x WS175. Fast-forward to Friday and we see tonnage starting to build again for the next window and consequently rates have taken a small dip, with 35 x WS242.5 achieved for TC17 on an older unit. Monday’s cargo enquiry will be key to where this market goes next.

UK Continent

With no ballast MR units heading towards the UKC due to weaker earnings in comparison to other markets, cargoes are left with the daunting task of trying to fix laden units with enough spare days to cover for any delays or spot prompt units if there are any around. Owners on the other hand are looking at the round trip economics and whilst most would be happy that they are coming into the UKC region laden, the export earnings are very poor so owners are trying to optimise this with the shortest ballast to the next load and fewest waiting days. This has created some volatility this week as replacement stems have paid more than last done. We approach the end of the week having seen levels go up to 37 x WS125 TA and WS145 to WAF. Question is what’ next for the inbound tranche of laden tonnage. There are a lot on the radar, so on paper rates should soften; with the yet, with euro port delays of late that is not a certainty at the moment, as these delays and consequential prompt replacements are largely what has kept an edge to this market. 

Slow start to kick off the week for Handies in the North, with little enquiry bubbling to the surface, which resulted in levels softening to 30 x WS145 for XUKC. Interestingly, as the week rolled on, there was a surge of enquiry for naphtha stems down to the Med and also prompt enquiry for TC23 as freight bounced back to the 30 x WS152.5-155 mark. Also with the MRs firming and those owners unwilling to lock in short-haul voyages in order to stay away from the UKC, charterers haven’t been able to lean on MRs to cover cargoes, which we have seen recently; as such, Handies have mopped up the majority of the business. A few failures on Friday feels like the momentum has now been lost in the market, with a fresh look at lists come Monday morning.

Med 

The flat market continues for MRs in the Med, with fixtures slowly ticking along and front end tonnage being worked through. WS137.5 for last done up to UKC on a naphtha stem may carry a grade premium; therefore a fresh test is needed to see what a true Med-TA ums cargo yields. Similarly to Handies, charterers will have more options come Monday. Additionally, with the prospect of a toppy market across the pond, there is interest in whether feedstock will head there or not. However, if rates sustain, then MR tonnage may tighten further in the Med and we could see some upward pressure created, as the units from the South will continue to eye the USG. 

After a couple of days of replacements, we saw rates climb from 30 x WS185 to a high of 30 x WS212.5 and the market was active with owners capitalising on this movement. Near the week’s end we saw a clouded and spread market after 30 x WS175 was done. However, the WS175 is not a true reflection of the market, with the list tight regarding appropriately aged tonnage without dubious AIS history, especially in the WMed. Whilst rates been holding relatively steady until yesterday, it seems we have entered a recalibration phase in the Med. Last done sits at 30 x WS185 ex Sicily. It will be interesting to see how the list restocks after the weekend as charterers may have a few more options to choose from, potentially putting some downward pressure. Nonetheless, the owners’ sentiment is not bearish as it stands.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

The North has seen a quiet week overall with little by the way of action. The week started with a trim list leaning in owners’ favour but like last week, enquiry got off to a slow start which kept WS240 the target for charterers. Relets fixed into programme keeping list lean but leaving external providers without much cargo. Looking ahead to next week we expect to see a similar pattern but tonnage will begin to open up early, which could apply some negative pressure to rates.

Its been an interesting week in the Med for Handy owners. The list started off lengthy and with prompt positions there to work as enquiry was slow to surface. After a quiet start, enquiry started to enter the market without the anticipated larger slide in rates. 30 x WS230 was the magic number for the week, which saw multiple deals concluded trimming up the list, with enquiry continue to flow until afternoon on Friday. Replenishment will be important as currently the market does feel like it could turn, if the list is favourable to owners on Monday morning.

MR

MR enquiry has been scarce in the North following the Handies. Units begin to open up early second decade, which should create some competition for owners. WS170 looked to be on the cards but as the week progressed and positions began to creep up the list, we now feel that last done levels look achievable at WS165 for charterers. The Med has seen the better of full-stem enquiry but with the lengthy list at the start of the week, levels softened to WS160. Sentiment feels on the steady/firm side but an active start next week could shift levels in owners’ favour.

Panamax

A quiet week for UKC/Med Panamaxes as enquiry has come mainly from the USG as back haul incterest to states is elusive. TD21 saw a rise in rates early doors before beginning to slow down and found support at the WS150 level. Positions are there to work, however, and enquiry will need to surface early next week if levels are to hold.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

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

wk on wk changeAug 7thJul 30thLast Month*FFA Q3
TD3C VLCC AG-China WS1357444956
TD3C VLCC AG-China TCE $/day16,50038,75022,25028,50033,250
TD20 Suezmax WAF-UKC WS41121808090
TD20 Suezmax WAF-UKC TCE $/day27,25054,00026,75025,75031,000
TD25 Aframax USG-UKC WS-1151152140144
TD25 Aframax USG-UKC TCE $/day50036,00035,50030,00028,750
TC1 LR2 AG-Japan WS5153148111 
TC1 LR2 AG-Japan TCE $/day2,00037,50035,50021,750
TC18 MR USG-Brazil WS38238200176184
TC18 MR USG-Brazil TCE $/day7,75033,50025,75021,25021,000
TC5 LR1 AG-Japan WS19176157144153
TC5 LR1 AG-Japan TCE $/day5,50031,50026,00022,25023,250
TC7 MR Singapore-EC Aus WS-6184190202186
TC7 MR Singapore-EC Aus TCE $/day-75020,25021,00022,75019,500

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

Bunker Prices ($/tonne)

wk on wk changeAug 7thJul 30thLast Month*
Rotterdam VLSFO  -40469509521
Fujairah VLSFO  -20496516521
Singapore VLSFO  -19504523524
Rotterdam LSMGO  -50662712707

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