The VLCC spot market has erased the gains made in a brief mid-July spike, with rates moving south in the Middle East and Atlantic markets.

But despite the gloomy trajectory, VLCC spot rates are somewhat higher than last year at a time when it is common to have a seasonal slump.

Average time charter equivalent rates fell to just under $29,100 per day on the final day of July, down 19.9% since this time last week, when spot earnings hit their July peak of about $36,300 per day.

July seemed to have been headed in the right direction, with rates climbing from a nadir of $27,100 per day after sliding from $31,100 per day at the close of June.

Yet Wednesday’s gloomy spot earnings are well above this time last year, when average rates clocked in at just over $14,600 per day, before turning negative in September.

Adding to the downward momentum was a Wednesday charter by Chevron to lift a West Africa cargo.

Data from Tankers International showed that Chevron booked Capital Ship Management’s 320,800-dwt Amyntas (built 2019) for a voyage to China at a rate that will fetch commercial operator Heidmar the equivalent of nearly $50,200 per day.

But the London-headquartered operator is benefiting from the scrubber-fitted ship’s position that shortens the voyage to just 63 days.

Tankers International, a VLCC pool operator that provides market data on an online app, estimates that the fixture is worth $34,200 per day on the typical 82-day round trip.

Excluding a pair of failed spot charters in recent days on the route, the last fully fixed, scrubber-fitted VLCC to score a deal earned more — about $35,900 on a round-voyage basis in a deal signed on 22 July.

VLCCs on the benchmark Middle East to China route fared no better, with no new fixtures emerging on Wednesday despite plenty of available ships.

“With ample supply of tonnage in the Middle East, brokers report that sentiment is expected to remain soft in the short term,” Clarksons Securities analyst Frode Morkedal wrote in a note to clients.

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He said that while the assessment for an eco-vessel shed 12.5% on Tuesday to reach $34,200 per day, forward freight agreement (FFA) contracts for August were pointing to $28,000 per day.

It is typical for the VLCC market to dip into the doldrums in July, as refineries take advantage of lower demand to shift into maintenance season, and the FFA futures curve points to better rates in the winter.

But those FFAs dipped lower on Wednesday, as December VLCC futures on the TD3 route from the Middle East to China dipped 1.15 WorldSsale points to WS 70.8.

That is still better than Wednesday’s spot rate on the physical market of WS 47 for the same route, but it is less optimistic than the WS 73.7 December contracts cost a week earlier.

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