Crude tanker rates in the Atlantic and European markets have fallen back towards pre-war levels, as tankers that would have returned to the Mideast Gulf instead populate more liquid markets.
The Black Sea-Mediterranean Suezmax route reached WS475 ($57.19/t) in late March from WS200 ($24.08/t) the day before the war began. The route rate is now WS230 ($27.69/t) after dropping by almost 50pc in two days, with the swift fall driven primarily by supply of available tankers.
More light sour CPC Blend and light sweet BTC Blend is heading to Asia-Pacific, pulled east by continuing strong regional demand for Atlantic basin crude. This would generally underpin rates, but more tankers are available for this route.
Europe-bound Suezmax rates from the US Gulf coast and Guyana sank to their lowest since the start of the war in the Middle East as a result of tonnage shifting away from the Mideast Gulf.
In the US, a charterer booked a very large crude carrier (VLCC) for loading from the US Gulf coast at the lowest rate since the start of the war, after an influx of available tonnage entered the region earlier in the month.
European Aframax rates also plummeted. The Ceyhan-origin cross Mediterranean route ended the London day on Monday, 20 April, at WS270 having peaked at WS655 on 30 March. The slide was probably on the back of falling Suezmax time charter equivalent (TCE) rates, which led Aframax owners to drop their offers beneath Suezmax levels in order to remain competitive with the larger vessel class.
Rates had previously surged as demand for demand for Libyan crude increased since the start of the war. Mediterranean refiners have turned to the north African country's Es Sider grade as a substitute for Iraqi Basrah Medium, exports of which been halted by the effective closure of the strait of Hormuz.
