Asian Aframax rates recovered from recent lows as charterers rushed to book year-end cargoes before the Christmas holidays, leading a flurry of activity especially in the Indonesia/Singapore region. Rates for the key Indo/Japan route basis 80 kt jumped by w13 points w-o-w to w110 as of today while rates for the key AG/East route grew by w8.5 points on the week to w112.5. Potential weather delays in the Far East as well as higher bunker prices contributed to more bullish owner sentiment.

In the Indonesia/Singapore region, firm owner resistance regarding longhaul trips to Australia forced charterers to pay a premium to cover such cargoes. The subsequent pick-up in fixing activity helped to clear out most prompt tonnage and shorten the position list. As such, market participants began to cover cargoes privately with ships disappearing from the position list without much details. In the AG segment, a lack of ballasters from the East over the past couple weeks has tightened vessel supply (especially for modern ships). Owners also showed a preference to ballast over to Med in hopes of a winter spike with delays in Turkish Straits.

The unexpected shutdown of the North Sea Forties pipeline and subsequent surge in Brent-Dubai EFS spread has led to greater demand for regional Dubai-linked crudes such as ESPO and Sokol. As reported by Reuters, ONGC recently sold February-loading Sokol crude at the the highest premium in 2 months. Higher demand for regional crudes is likely to lend support to the Asian Aframax sector in Q1 next year.

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