Key takeaways from this report:
Dirty – East of Suez: VLCC utilisation back up, but uncertainties on a rally continuation are looming
Clean – East of Suez: India exports quickest to respond to reduced risks for Red Sea transits for E-W middle distillate flows
Dirty – West of Suez: Chevron licence revocation could dampen Aframax in the US market
Clean – West of Suez: Weak growth momentum continues for Russia MRs as Russia CPP exports (excl. diesel) degrade
Dirty – East of Suez: VLCC utilisation back up, but uncertainties on a rally continuation are looming
After a declining H2 2024, global VLCC demand rebounded, with utilisation climbing over 50% since the start of 2025
➔ Increasing VLCC fixing activity from the Atlantic Basin supported rates during this period
➔ China and India, buyers of Russian crude grades, were seeking alternative crude supplies after the US imposed sanctions on Russian-trading vessels
However, utilisation has plateaued since the start of February
➔ VLCC TD3C (Middle East-to-East) and TD15 (West Africa-toEast) are showing a similar trajectory
➔ This could indicate that India and China are trying to find ways to secure discounted barrels, despite OPEC’s announcement of unwinding production cuts
➔ Turkey’s decision to reduce exposure on Urals could create higher Urals availability, carried on smaller tankers - but logistics remain a question mark
➔ US tariffs on China and the current geopolitical climate have driven a softening on TD22 (US Gulf-to-East) rates
Clean – East of Suez: India exports quickest to respond to reduced risks for Red Sea transits for E-W middle distillate flows
Voyage counts of diesel and jet fuel via the Red Sea from key suppliers, especially India, have picked up in recent weeks
➔ Operator profile includes less risk-averse shipowners and entities that transited via Bab-el Mandeb throughout the period of attacks
Voyages from the Middle East Gulf and India - the main suppliers to Europe/western buyers - are higher in February (on a departures basis) with the latter substantially increasing m-o-m
Other major Middle East exporters of jet and diesel (Saudi Arabia, UAE, Qatar) have been more cautious in increasing flows via Red Sea in February
➔ For Saudi Arabia, exports from its Red Sea refineries (Yanbu and Jizan) somewhat mitigate the need to send shipments from its Jubail refineries via Bab-El Mandeb
Even with the India-led February uptick, total voyages via the Red Sea remain well short of pre-2024 levels, and a recent increase in tensions between Israel-Palestine may prompt a resumption in Houthi attacks on vessels linked to western/Israeli trading activity
Dirty – West of Suez: Chevron licence revocation could dampen Aframax in the US market
Chevron will likely wind down its crude production in Venezuela by early April following the license revocation
Since the US waiver on Venezuelan crude expired in May 2024, 18 Aframax vessels had been actively engaged in this trade
➔ On average, 12 voyages per month have been loading out of Venezuela and heading to the US, specifically on this trade route
➔ While others have been moving in and out, seeking alternative employment in regions like the US Gulf, Mediterranean and Northwest Europe, shifting towards longer-haul voyages, and the trend may continue, building vessel supplies in those regions
➔ There is no clear indication yet that vessels are leaving the Venezuela trade as of now, among the 8 ballasting vessels, 5 are declaring Venezuela as their destination
Moving into April, Venezuela’s crude exports are expected to shift to VLCCs for transportation to further destinations like Asia. With the dark fleet supply remaining tight, there is a possibility that mainstream VLCCs will enter these trades
Clean – West of Suez: Weak growth momentum continues for Russia MRs as Russia CPP exports (excl. diesel) degrade
Employment of MRs lifting CPP cargoes out of Russia have fallen by 30% month-on-month in February, maintaining a weakening growth momentum since late 2024
➔ This is an implication of Russian oil exports (with exception of diesel) declining at approx. 500kbd year-on-year
➔ Russia CPP exports, especially from Black Sea ports, tumble as refinery maintenance underway from series of drone-related outages in Southern Russia
This supply-side pressure has incentivised MRs to reposition regionally, particularly to the Mediterranean from Black Sea, and service the Europe CPP trade
➔ Europe MR prompt availability has spiked since beginning of March, increasing competition for mainstream cargoes in Northwest Europe and the Mediterranean
➔ However, Europe’s CPP loadings have begun to stagnate given refinery maintenance and high domestic consumption in Winter
In the short-term, a resurgence in MR employment from such a repositioning is unlikely
Data Source: Vortexa