Suezmax tanker rates leapt forward on Thursday, with several market indicators showing that spot earnings have increased by double or more in 24 hours.
The rise came on the back of hot aframax rates for voyages out of the US Gulf Coast, luring suezmax owners to the smaller cargo stems.
The Baltic Exchange’s assessment of time charter equivalent rates for the sector leapt by 103% in a day to reach almost $33,000 per day.
That is the highest level for the suezmax tanker segment since 26 July, when rates were continuing to bounce downward from a peak of more than $132,000 per day in November last year.
And it represents a significant rise from a trough that reached as low as $9,442 per day on 22 September.
The strength was driven primarily by the Atlantic market, where New York shipbroker Poten & Partners said rates for a voyage from West Africa to the UK or continental Europe were $30,700 per day on Thursday, nearly triple the $11,300 per day a day earlier.
Brokers said the 159,400-dwt Raptor (built 2007), which operates in Navig8’s Suez8 pool, scored a fixture from Repsol to carry crude from Nigeria to Spain at WS 105 on a WorldScale basis. Rates were assessed at just WS 78 a day earlier, according to Baltic Exchange data.
Robert Boles, head of suezmax tanker chartering for UK shipbroker Simpson Spence Young (SSY), told TradeWinds that the gains in the Atlantic on Thursday were driven primarily by aframax demand on the US Gulf Coast, which has often been a factor in suezmax markets this year.
That has given suezmax owners with vessels open in Europe options at a time when fewer will venture into the Nigerian market, after the government demanded higher freight taxes from the tanker sector.
He said some owners are only willing to move Nigerian crude cargoes with protective clauses that shield them from the tax. Although about 80% will still lift crude from the country without such clauses, there were few around when Thursday’s Nigerian cargo hit the market.
Average rates for smaller aframaxes on the Baltic Exchange leapt by 31.4% on Thursday alone, reaching $32,500 per day for the first time since 21 July. The figure represents a quadrupling of the sector’s rates since the 2023 low of $7,552 per day on 11 September.
VLCCs also continued to pull out of a loss-making slump on Thursday, surging 47.8% in a day to nearly $12,000 per day, which may also help the suezmax sector’s piggybacking.
“With both aframax and VLCC markets hot, owners’ sentiment remains bullish as we head into Friday, with little sign of any slowdown for the time being,” said UK shipbroker Howe Robinson.
But the meteoric rise of suezmax rates on Thursday could lead charterers to hit the brakes.
“A lot of charterers will probably sit back now because the rates have gone up so quickly,” Boles said.
This story has been amended since publication to reflect that SSY’s Robert Boles said most suezmax owners are willing to take Nigerian cargoes with protective clauses.
