WAF-East VLCC market falls to 13-month low on weak demand, ample tonnage

Freight rates for Very Large Crude Carrier voyages loading in West Africa ended the week to Dec. 6 at their lowest level since October 2023, with sources citing lackluster inquiry levels and a bloated tonnage pool across all major VLCC loading zones.

Platts, part of S&P Global Commodity Insights, assessed freight on the 260,000 mt WAF-East route at w49 on Dec. 6, down from an average of w54.26 over the month of November.

"There's still activity going on, with ships going on subjects on private terms over the past few days, but inquiry levels have been lower than expected for this period -- there were high expectations for Q4," a London-based VLCC broker said. "I'd have liked to have said we've reached a bottom, but the Persian Gulf could still shave off a point or two."

"I don't see a lack of cargoes -- activity is there, but charterers are taking ships under the radar and [owners] don't have the patience to work the market," a Europe-based shipowner said.

The same owner also attributed the drop in rates to many participants being away at shipbroker parties in London during the previous week. According to the owner, this reduced activity levels and disrupted the usual information flow process.

The fundamental picture for the VLCC market is likely to remain bearish in the near term, with market participants noting that tonnage lists remain more than sufficient for current monthly volumes. However, expectations of increased demand in the Persian Gulf for cargoes loading in the third decade of December and recent firmness in the Suezmax market could provide some support for flagging VLCC rates, according to shipbroking sources.

Platts, assessed freight on the 130,000 mt WAF-UK/Continent route at w92.5 on Dec. 6, up from a two-month low of w72.5 reached on Nov. 26, with sources citing increased Suezmax cargo demand in WAF and support from a rapidly firming US Gulf transatlantic market.