Arabian Gulf Clean Tanker Market Strengthens on Firm Demand and Tightening Tonnage

Clean freight rates in the Middle East Gulf trended higher over the week, led by renewed demand from East Asian charterers and a tightening tonnage list. LR2s began the week on a firmer footing, assessed at WS 152.5, with BP fixing MT Advantage Love for 75,000 tons of naphtha loading 18 August. Rates climbed to WS 157.5 midweek, before softening slightly back to WS 152.5 as inquiry lost steam and more ships surfaced on subs.

Despite the slight pullback, sentiment remained constructive, with MT Pacific A. Dorodch booked by YNCC at WS 153 for 24 August, illustrating the market’s upper bound. The LR1 segment followed a stronger trajectory, opening at WS 160 and gaining steadily as availability tightened. MT Metro Mistral was fixed by Onex at WS 170 from Khor Al Zubair, followed by MT Sovereign taken by Reliance from Sikka at WS 177.5 for 13 August, confirming firm appetite from charterers amid thinning lists, particularly for modern units.

MRs mirrored this strength, especially on East Africa routes where freight climbed to WS 252.5 on the back of sustained demand and limited prompt positions. Early in the week, CSSA fixed MT Draco at WS 255/245 ex-Duqm, while MT Torm Alice was secured by Shell at WS 252.5 out of Kuwait.

Japan-bound MRs edged up as well, assessed at WS 175, supported by rising naphtha flows and forward coverage ahead of refinery restarts in Asia. Toward the end of the week, East Africa rates eased slightly to WS 250, while South Africa held steady. Notably, MT PVT Solana was booked by ST Shipping for 35,000 tons ULSD ex-Duqm at WS 247.5/237.5 for 18 August. Overall, activity remained robust, with players like Shell, ST Shipping, and Vitol active across the board.

Despite the minor correction, MR sentiment stayed firm as repositioning to Fujairah and shifts in Indian product flows helped tighten fundamentals.

Westbound trades saw mixed adjustments across segments. LR2 lumpsums advanced to $4.15M, reflecting healthy activity and tightening forward stems, while LR1s held firm at $3.2M amid balanced supply-demand dynamics. MRs softened marginally to $2.3M, impacted by more measured inquiry for late August dates. Still, with structural demand intact and several key charters yet to surface, the outlook remains cautiously positive.

By Selim Jenhani, Riverlake freight analyst