Dirty freight market report: TD25 overvalued while TD3c is poised to strengthen

TD3c remains undervalued and set for gains, TD22 is bullish on spot but overpriced in the forward months, while spot TD20 is overvalued with weaker rates ahead.

The Sparta RBI (relative basket index) compares the route in question against all material relevant global competing routes delivering crude grades into the same destination. It provides an under/overvalued signal and is an inverse leading indicator for freight demand and FFA price action.

TD25: RBI $3.41/mt undervalued after a sharp retreat last week. Spot TD25 sold off 30 WS to 148 WS, making rates much more competitive. Afra supply (14-day) is 11, four below average, still relatively tight though looser than last week. Cheaper WTI into NWE, an undervalued RBI, and constrained tonnage point to a rebound into the mid-150s WS, with September following higher. October and November RBIs now sit neutral.

TD20: RBI $3.27/mt overvalued — the highest since April, when rates quickly dropped back to neutral within a week. Tonnage counts then were similar to now. Bonny Light into NWE has moved to neutral valuation as freight has strengthened. Suezmax supply (14-day) is 11, in line with the average. With an overvalued RBI, neutral crude valuation, and average supply, the spot outlook has weakened. Expect TD20 to narrow its 30-point spread to September. The forward curve (Sep–Dec) is fairly valued.

TD3c: RBI $2.17/mt undervalued and materially underpriced. Spot TD3c retains pricing power with room to climb toward 65 WS. RBI valuations have remained steady despite recent spot gains — a bullish signal. The spot/Sep spread remains too steep at –5 WS points. Arab Light into China is pricing in line with competition. VLCC supply (14-day) is 38, five below average. Sustained undervalued RBI, neutral crude economics, and below-average supply suggest spot should continue higher. The Sep–Dec curve is now only marginally undervalued.

TD22: RBI $1.13/mt undervalued, but forward curve RBIs remain about $5/mt overvalued. WTI into China has repriced lower, now landing competitively. USGC VLCC supply is tight, with no prompt vessels available. An undervalued RBI, supportive crude economics, and tight tonnage keep the spot outlook bullish, though the forward curve remains too expensive and should correct lower.

(TD25 RBI and WTI valuation)

(TD25 vessel supply)

(TD20 RBI and Bonny valuation)

(TD20 vessel supply)

(TD23c RBI and Arab Light valuation)

(TD3c vessel supply)

(TD22 RBI and WTI valuation)

(TD22 vessel supply)

Michael Ryan, our Freight Commodity Owner at Sparta, brings over a decade of experience with Trafigura in the energy sector managing risk across products and regions before becoming Head of Risk for subsidiary Puma Energy. Michael then joined the Trafigura commercial team trading freight while successfully growing the physical fleet through strategic dealmaking.

Sparta is a live, market intelligence and forecasting platform that enables oil traders, refiners, banks, hedge funds and wholesalers to have access to real-time and global actionable insights to capture market opportunities before others.

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