The Aframax and Suezmax tanker classes have also seen declines but have been slightly supported in the West of Suez by increased US crude exports towards Europe. These tanker classes have seen the majority of their tonne-mile declines stemming out of Russia (as they prioritise higher-value diesel exports at the expense of crude exports), mostly towards China but also to other Asian countries.

In the last 3 months, Suezmaxes have stood out as showing significantly more flexibility for switching between different crude trades. Specifically, data from our Freight API/SDK shows operators using trade routes such as Middle East-to-Med in between Russian crude voyages to optimise operations. Additionally, Suezmax tankers have shown signs of moving away from the Chinese crude trade by signalling West Africa after discharging in China, suggesting a switch for those tankers to European crude trade as well. In contrast, Aframax and VLCC tankers operating in the Chinese crude trade have shown little to no signs of altering ballast destinations after discharging in China.

In conclusion, the slow down in crude tanker demand is likely a result of current crude demand not quite being able to match the surge in crude supply to the market earlier in the year. This is causing a slowdown in seaborne trade, and the current freight rate picture for crude tankers suggests that this will likely propagate in the summer months. However, the flexibility shown by Suezmax tankers may keep tanker supply tight in the segment as they compete in alternative markets. Finally, a seasonal pick up in flows is expected to materialise in Q4 as the market digests crude supply, which – along with limited scheduled deliveries – will likely provide some upside for crude tanker rates as we close out the year.