WAF suezmax market to firm on tighter vessel supply and improving crude econs

TD20 vessel supply in the 14-day ahead window stands at 6 ships against a 90-day moving average of 8. The supply signal is mildly bullish, with the tonnage list showing six WAF-centric ships available before end of the 10–12 May fixing window, the majority of which are eastern ballasters repositioning via the Cape. The list was much longer, 17 open vessels, just a week ago. The outlook for rates basis available tonnage has improved.

The Bonny Light crude RBI sits at -$1.42/bbl, a modest but directionally bullish signal for cargo demand competitiveness into NWE. Neil noted this morning that Bonny Light and Johan Sverdrup are among the few grades capable of threatening WTI Suezmax economics into Europe, and that WAF medium and light grades still look a touch expensive relative to competing crudes, needing premiums or freight to ease another $5/bbl before the eastbound arb fully opens.

He also flagged the re-selling of WAF cargoes by Chinese majors last week as a notable development, relating it to Chinese authorities drawing on their SPR and cutting SOE runs, which reduces a key incremental demand outlet for West African barrels on the eastbound leg. That dynamic is a potential headwind for WAF vessel demand and TD20 paper.

A compelling near-term bullish signal is the notable lack of fixtures being reported for second-decade May WAF VLCC stems. The count is materially below average, which should support increased Suezmax enquiry this week to. The freight RBI at -$19.74 confirms TD20 is undervalued at current spot levels of WS 219 and the selloff was too steep, reinforcing the case for a rate correction higher as cargo demand materializes.

Fixture activity over the past seven days reflects a market repricing from depressed levels. Delta Supreme was placed on subs loading WAF for Eastern discharge at WS 225 for 10 May laycan, while Marlin Somerset was placed on subs loading Pazflor Oil Field for UKC at WS 217.5 for 8 May laycan. GH Christie was placed on subs loading Egina Oil Field for Canaport and Almi Sky placed on subs loading Pazflor Oil Field for Chennai at 6,500K lumpsum. These levels confirm a market working off trough level rates and beginning to build momentum.

TD20 May paper should trade higher this week. Tonnage remains tight, WAF crude econs have improved, and light VLCC May fixture activity points to increased suezmax rates to close out April trading. Owners to hold firm and push for above last done levels.