Dirty freight market report: TD3c strength weakens Arab Light valuation into FE

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 now undervalued -$2.65/mt after last week’s selloff (vs +$1.94/mt prior). Afra supply (16, 14d) is one above average and longer w/w. WTI into NWE marginally undervalued (-$0.38/bbl). Sep TD25 dropped 20 WS in a week, overshooting to the downside; fair value ~160 WS. Spot looks mildly bullish for a rebound toward 160 WS on undervalued freight RBI, marginally undervalued WTI, and neutral tonnage. Q4 RBI nearly neutral, only marginally overvalued.

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.

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