Singapore MR prompt vessel supply halves as long haul and intraregional demand support freight rates

Vessel supply in the Singapore MR market has fallen from 28 ships in the seven-day ahead window two weeks ago to just 11 today, against a 90-day moving average of 23. This is the sharpest tightening in the prompt window since December. With incremental vessel demand three ships above normal, the FSD model remains bullish, forecasting rates to firm from WS 388 to WS 404 over the coming week into the 25 April to 4 May load window.

Last week’s sustained long-haul Australia programme has given way to intraregional short-haul activity to start this week, with fixtures loading ex-Singapore and Indonesia for regional discharge. Meridian Express was placed on subs loading intra Singapore at $0.5m and Pacific Cobalt went on subs loading Kertih for Singapore at $1.125m, both for late April laycans. Hafnia Tiger was placed on subs loading Tanjung Pelepas for Continent. The shift toward short-haul fixtures reflects the SEA region working to keep product more local after the wave of longer-haul business last week.

The macro backdrop underpinning Singapore MR demand has intensified materially over the weekend. June Goh noted today that the Strait of Hormuz is more shut than ever. By Sunday, no vessels were observed crossing at all, with the ceasefire hanging by a thread after the US Navy fired on and seized an Iranian-flagged container ship. Kuwait has declared force majeure on crude oil and refined product shipments, with output at levels last seen during the Iraqi invasion of the early 1990s.

With 10 to 11 million barrels per day of crude still shut in and product shortages set to become increasingly visible in regional balances, June noted that Indonesia and Malaysia, both significant importers of Singapore-origin gasoline, face growing supply pressure that will sustain intraregional cargo demand on MR tonnage.

The arb picture reflects Singapore pricing to keep barrels local. The Singapore to Rosarito gasoline arb is closed in May at -4.95 cpg, and the Dar-es-Salaam and Durban diesel arbs are similarly closed across the curve. With Singapore working to retain product rather than pricing to export. US crude and product exports via the Panama Canal are meanwhile approaching a four-year high as Asian refiners scramble for Atlantic supply, with shippers paying more than $3 million to jump the queue.

With the prompt tonnage list at less than half the 90-day average, Hormuz all but shut, and intraregional product demand building as Southeast Asian balances tighten, owners remain firmly in the driving seat. TC7 rates should continue pushing higher as the May fixing window approaches.