WAF Suezmax Market Report

WAF Suezmax vessel supply in the 14-day ahead window stands at 14 ships against a 90-day moving average of 12. The supply signal is mildly bearish on count alone, but the two more important signals are pointing firmly bullish. The combination of an undervalued crude RBI and an emerging geopolitical demand shift makes the current supply overhang less important in today’s analysis.

The Bonny Light crude RBI has moved into deeper undervalued territory to -$5.36/bbl, confirming Nigerian barrels are cheap into NWE destinations. The freight RBI sits at -$7.78/mt, confirming TD20 rates are undervalued relative to global competition.

Both signals are firmly bullish and have been reinforced by the broader WAF crude pricing backdrop, with West African grades becoming increasingly attractive into most global destinations over the last two weeks. Undervalued crude increases cargo demand, and cargo demand tightens tonnage supply. The fundamental outlook for a TD20 move higher is clearer than it has been since the end of June.

The paper market has not yet priced a material move higher in physical demand, but September paper is beginning to narrow the spread to August paper. August TD20 traded at WS 220 yesterday before firming to WS 222.5, softening briefly to WS 221, then firming through WS 224 and WS 225. September traded at WS 190 before firming to WS 200 and WS 205. Q4 traded at WS 185, firming to WS 187.5 and WS 190.

The most significant development is the emerging Bab-el-Mandeb risk. If Houthi threats turn into attacks, the consequences for the global Suezmax segment are bullish. Suezmaxes loading Yanbu and transiting the Suez Canal and then rounding the COGH would see their effective voyage distance increase by approximately 2.5 times to the FE, a tonne-mile multiplier that would absorb significant tonnage supply from the global fleet.

That displacement would draw tonnage away from WAF toward the Red Sea and Mediterranean routing, tightening the WAF list and pushing TD20 rates higher. Combined with the already undervalued Bonny Light RBI, the potential for Bab-el-Mandeb disruption creates a scenario where both the cargo demand signal and the vessel supply signal shift simultaneously in favour of owners.

Fixture activity last week was busy but has slowed materially this week. Apache fully fixed loading Lekki for UKCM at WS 255 for a 30 July laycan, Pathway fully fixed loading WAF for Spain at WS 230 for a 3 to 4 August laycan, and Nordic Space fully fixed loading WAF for Lekki at $2,900K for a 26 July laycan. Rates could drift lower through the balance of this week due to slow enquiry, but there is more risk to the upside than downside when looking ahead.

With the Bonny Light RBI materially undervalued, the freight RBI undervalued, paper market just starting to firm across the H2 2026 strip, WAF crude attractiveness improving into global destinations, and the Bab-el-Mandeb risk adding a potential structural tonne-mile tailwind, the near-term direction for TD20 is constructive.

The supply count being two above average and the quiet enquiry this week are the two headwinds to higher spot rates, but when looking further ahead, they are outweighed by the strength of bullish signals on both the crude and freight sides. Owners should hold firm and push above last done levels. The paper market should begin to price increased Suezmax demand into August.