A wide gulf between charterer and shipowner bid-ask spreads has muted the very large crude carrier (VLCC) market for spot voyages out of the US Gulf coast and Brazil since Russia invaded Ukraine last week.
Shipowner offers for US Gulf coast-China VLCC shipments were heard as high as $9.5mn, with charterer bids heard as high as $7mn, according to a shipbroker. But no VLCCs have been booked near these elevated bid-ask levels for voyages out of the Americas.
The conflict has caused rates for the vessel class to surge globally on the back of rising bunker prices and uncertainty over sanctions on Russia.
Since 22 February, the Argus US Gulf coast-China VLCC assessment has risen by 47pc to $6.85mn lump sum, and the Brazil-China VLCC rate has risen by 64pc to $21.40/metric tonne, both the highest since May 2020.
Instead of booking on the spot market, charterers have instead opted to either withdraw their cargoes or book VLCCs they had previously secured under time charters.
Aframax and Suezmax spot chartering persists
Chartering in the Americas for mid-sized crude tankers, on the other hand, has continued at typical levels following a brief lull last week. Aframax and Suezmax rates have retraced some of their gains since the conflict began.
Since 23 February, the Caribbean-US Gulf coast Aframax rate has risen by just 3pc to $15.82/t, as the conflict has had little to no effect on the rate.
The US Gulf coast-Europe Aframax rate rose to $29.90/t from $24.30/t between 23 February and 1 March but has since fallen to $27.10/t. Forward freight agreements on the route experienced a similar jump followed by a retrace, as the April contract rose by to $25.42/t from $18.97/t between 23 February 1 March before falling yesterday to $23.36/t.
Similarly, US Gulf coast-Europe Suezmax rates jumped to $18.05/t from $12.68/t between 24 and 28 February but have since fallen to $13.66/t.
