VLCC spot rates have hit their highest level in six weeks following a flurry of activity in the Middle East and West Africa.
Latest rates are up 61% on the week and 19% on the month at $34,900 per day, according to Clarksons.
Year to date, however, the average is still $42,000 per day, some way behind 2023’s $51,200 per day, the brokerage said.
This mirrors Jefferies’ average of around $35,000 per day for non-eco vessels, above the roughly $20,000 per day low last week and compares with their year-to-date average of $41,500 per day.
“This latest upswing, in which average rates have gapped up by roughly $10,000 per day in a matter of days, comes on a jump in fixture activity in the Middle East,” Jefferies said in its daily report.
“Whether this is the beginning of a gradual move higher or simply comes as a result of pent-up charterer demand following a quieter period in early July remains to be seen.”
For August, Jefferies foresees a modest uptick based on the volume of spot fixtures, which had been telegraphed by the slight reduction in Saudi Aramco’s selling price for Asian buyers.
Previously the premium across its average export grades to Asia was lowered from $2.14 per barrel for July to $1.58 per barrel for August, which is supportive of VLCCs.
VLCCs had been under pressure since May due to lower cargo availability in the Middle East market, primarily because of peak seasonal consumption in the region, while production remains flat.
“Overall, VLCCs seem likely to remain pressured until the September loading program, due to begin mid-August, which should coincide with lower domestic consumption and higher export availability,” Jefferies concluded.
