TD25 Market Report

USGC Aframax vessel supply in the 14-day ahead window stands at 3 ships against a 90-day moving average of 11, placing prompt availability 8 vessels below average. The supply signal is firmly bullish, representing one of the tightest tonnage readings on the route in recent months and providing the primary structural support for the rate surge now underway.

The WTI crude RBI sits at -$7.59/bbl, confirming that US crude remains highly competitive into European destinations and underpinning consistent transatlantic cargo demand. Nikolas Plonski highlighted today that WTI USGC FOBs have gained +$1.60/bbl since 13 March to +$3.20/bbl, further cementing US crude’s competitive position and sustaining the structural pull for Aframax tonnage out of the Gulf. Spot TD25 at WS 718 with the freight RBI overvalued indicates rates are running ahead of fundamentals, though with vessel supply this tight and cargo demand this well-supported, the overvaluation is unlikely to correct materially in the near term.

Fixture activity over the past three days confirms the market is repricing sharply higher. Advantage Angel was placed on subjects loading USG for UKC at WS 725 on an 8 April laycan and Ryman followed on the same routing at WS 725 for a 10 April laycan. Amalthea was fully fixed loading USG for UKCM at WS 700 for a 7 April laycan, and Calida placed on subjects for the same routing at WS 615 for a 14 April laycan. The cluster of USG-to-UKC fixtures at or above WS 700 for early April loading confirms that charterers are paying a significant premium to secure cover and that owner confidence to push above last done is strong.

WDF paper traded actively yesterday, with balmo at WS 700, April softening from WS 530 before partially recovering to WS 515, and May trading up to WS 335. June traded at WS 255. The steep backwardation from spot through the forward curve reflects the market’s view that the current supply squeeze is crisis-driven. Though the gradual firming in Q4 relative to Q3 paper over the last few days suggests participants are beginning to price a more prolonged resolution timeline and Q4 usually prices above Q3.

With vessel supply at just 3 ships against an 11-vessel average, WTI crude firmly competitive into Europe and the rest of the world, fixtures printing at WS 700 and above, and Iran headlines chaotic, all primary signals are bullish. The freight RBI overvaluation is the sole cautionary note but is insufficient to offset the weight of constructive evidence. TD25 rates should move even higher as Suezmaxes follow suit.