Rates for crude and product tankers have been coming under “heavy pressure” so far in the traditionally stronger fourth quarter, Gibson Shipbrokers says.
The London shop said this “persistent weakness” is causing concern.
Clarksons Research has calculated that overall seaborne trade remains on track to register growth of more than 6% in tonne-miles this year, the fastest rate of expansion for 14 years.
But this is not true of all ship types.
Aframaxes have suffered the most on the dirty side of the market, Gibsons noted.
Data from oil analytics company Kpler shows global crude tonne-miles for this size group are down by 2.5% year on year during the first 10 months of 2024, despite the start-up of exports from the expanded TMX pipeline in Canada and an uptick in trade out of the US, Gibsons said.
The largest decline in tonne-miles has been out of Russia, while Red Sea attacks and maturing crude production in Asia have added further downward pressure.
Production outages in Libya and field maintenance in the North Sea and Caspian Sea have also temporarily reduced demand, according to the brokerage.
Suezmax demand has remained more or less flat year on year, but there has been a notable decline in tonne-miles out of the Middle East, primarily due to rerouting via the Cape of Good Hope.
VLCCs more popular
Charterers have been opting more frequently for larger VLCC stems. Russian volumes are also sharply down.
But there have been “significant increases” in tonne-miles out of the US Gulf and Latin America, where exports have been particularly strong in recent months, Gibsons said.
VLCCs, by contrast, have experienced modest growth.
There have been fewer voyages from West Africa and the US Gulf, and lower demand into China.
However, this has been offset by a rise in shipments from South America and smaller gains from northern Europe.
Gibsons said the picture is more complex for the clean tanker market.
Up to the end of October, LR2 tonne-mile demand is notably up year on year, but there have been much smaller gains in MR demand.
LR1 and handysize demand is down a little.
Gibsons attributes LR2 rises to Red Sea diversions and gains in trades from the Middle East to India and the West.
Dirty tankers cleaning up
“However,” it added, “if we zoom into the data in greater detail, LR2 tonne-miles surged during the first five months of the year but have since been under downward pressure due to dirty-to-clean switching.”
LR1s have also suffered from this development.
MRs and handysizes have been hit by lower clean exports from Europe, most notably in recent months during heavy European refining maintenance, and declining exports into West Africa.
Overall, Gibsons also said a struggling Chinese economy is affecting crude and clean tanker tonne-miles.
“Going forward, fundamental changes are here to stay. Although seasonality will change, offering some support, nonetheless total demand may struggle to return to recent peaks,” it concluded.
