WAF TD20 Market Report

WAF Suezmax vessel supply in the 14-day ahead window stands at 3 ships against a 90-day moving average of 7. The supply signal is firmly bullish, but the ~120-point rally seen last week is only partly driven by the vessel count. WAF has been forced to price off the Americas even with the recently low WAF cargo volumes, with the USG/UKCM equivalent route providing the rate signals.

The West-to-East draw has been consistent throughout, displacing tonnage from the Atlantic while the Americas have continued to absorb ships from NW Europe in record volumes, leaving the WAF list structurally thin. The Bonny Light crude RBI sits at +0.04 $/bbl, effectively neutral, Bonny Light is fairly valued into NWE, but not particularly competitive. Cargo demand is therefore not the bullish driver here; vessel supply is. The TD20 freight RBI at +4.54 $/MT indicates rates are mildly overvalued, a modest counterweight to the otherwise constructive tonnage picture.

June Goh noted this morning that Houthis have entered the Iran conflict with ballistic missiles directed at Israel, raising the prospect of Red Sea and Bab el-Mandeb disruption that would threaten crude and product supply out of the region and could trigger Saudi production shut-ins. Brent futures opened at $115.99/bbl on the news.

Fixture activity in the WAF basin itself was muted last week. Beyond some Dangote noise, the Thalatta was placed on subs loading Kribi for East discharge on a 12-17 April laycan — a long-haul voyage that further strips prompt tonnage from the Atlantic. Away from WAF, the broader Atlantic market read-across is strongly constructive: over a dozen Suezmax fixtures were recorded in the USG last week against a 2025 average of 7, with several ships drawn in from NW Europe. The LatAm market reported elevated Suezmax fixing activity approaching twice average levels, with Guyana fixing TA above last done and Brazil fixing to UKC at around WS 375.

TD20 paper traded mostly sideways to end last week, with April softening from WS 320 to WS 310, May firming five points to WS 215, and June easing five points to WS 165. The curve prices in a sharp rate correction through Q2, but the Houthi escalation over the weekend further complicates the forward curve’s assumption of normalisation timelines.

With only a handful of prompt ships against a 7-ship average, a strong week of Atlantic basin Suezmax fixing activity, and a live Houthi escalation risk over the weekend, the near-term case for WAF Suezmax owners is supportive. Last week’s price action has nonetheless been largely driven by strength in other Atlantic regions rather than WAF cargo demand itself. For a higher-conviction bullish TD20 call, WAF crude grades need to reprice more competitively into global demand centres and rate strength needs to rely less on the support of regional competition out of the USGC and LatAm.