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Tanker Market

70

OPEC Monthly Oil Market Report – September 2017

Arrivals

in Europe were up from the previous month, while in the Far East, West Asia and North America,

arrivals declined by 0.01 mb/d, 0.04 mb/d and 0.43 mb/d, respectively, to average 8.82 mb/d, 4.64 mb/d and

9.77 mb/d.

Dirty tanker freight rates

Graph 7 - 1: Crude oil spot tanker freight rates, monthly average

VLCC

Following the typical trend in the summer months,

VLCCs

lacked tonnage demand in general, which

prolonged the tonnage list and thus kept spot freight rates under constant pressure as they had been in

previous months. VLCC spot fright rates were softer in August on several routes as competition between

ship owners put further pressure on rates and prevented them from achieving any gains, even during days of

relatively enhanced activity.

In August, VLCC daily earnings dropped to the lowest level this year so far and low freight rates discouraged

ship owners from getting involved in longer-haul voyages. Thus, VLCC freight rates on key trading routes

Middle East-to-East and Middle East-to-West fell, with spot freight rates decreasing by 18% and 6%,

respectively, from the previous month to stand at WS42 and WS24 points. Similarly, spot freight rates on the

West Africa-to-East route declined by 10% to average WS49 points.

Table 7 - 3: Dirty VLCC spot tanker freight rates, Worldscale

Suezmax

Suezmax

was the only class in the dirty tanker segment which showed a rate increase from the previous

month as a result of higher volumes of fixtures to eastern destinations, which led to tighter ship availability.

Suezmax freight rates saw minor gains on average in August, despite new deliveries adding to the already

oversupplied tonnage market. Freight rates for tankers operating on the West Africa-to-USGC route

remained unchanged from the previous month to average WS61 points. Similarly in the West, freight rates

on the Northwest Europe (NWE)-to-USGC route stood at WS55 points.

20

40

60

80

100

120

140

20

40

60

80

100

120

140

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Worldscale

Worldscale

Middle East/East (VLCC)

West Africa/USGC (Suezmax)

Mediterranean/Northwest Europe (Aframax)

Sources: Argus and Platts.

Size

Change

1,000 DWT

Jun 17 Jul 17 Aug 17 Aug 17/Jul 17

Middle East/East

230-280

51

52

42

-10

Middle East/West

270-285

26

26

24

-2

West Africa/East

260

56

54

49

-6

Sources: Argus Media and OPEC Secretariat.