Suezmaxes cash in on Kazakh export disruption

Suezmax spot rates are surging as Kazakhstan runs into mounting difficulties with its oil exports, tightening the tonnage list across the Mediterranean and beyond.

Kazakhstan has suspended flows via the Baku–Tbilisi–Ceyhan (BTC) pipeline after chloride-contaminated crude entered the system in late July, diverting volumes to the Caspian Pipeline Consortium’s (CPC) terminal near Novorossiysk. The pivot has coincided with maintenance at one of CPC’s three single-point moorings, leaving only two operational.

With capacity constrained, the consortium has shifted heavily toward suezmax loadings at the expense of aframaxes. September’s program features 46 suezmax liftings and no aframaxes, compared with an even split in August. Broker Arrow describes the suezmax scene around CPC at the moment as a “hive of activity”.

Rates have responded sharply. Med runs are now touching WS 142.5, while India-bound stems are also firming with Basrah/West cargoes on subjects around WS 60 via the Cape. The Baltic Exchange’s TD6 route from the Black Sea leapt more than $6,500 yesterday to close in on a hugely profitable $73,000 a day spot figure. According to Jefferies, suezmaxes are averaging $43,000 a day in Q3, up from $41,500 a day last quarter, with momentum building.

Brokerages warn that with CPC, West Africa, and Guyana all active, owners are likely to retain the upper hand. TD6 has held close to year-to-date highs, and with CPC volumes expected to stay at 1.65–1.75m barrels per day, shipowners are in no mood to ease off the throttle.

“Expect owners to continue to have the bit between their teeth,” broker Fearnley’s suggested, while Arrow added: “The tonnage pool continues to tighten, and if enquiry levels hold, owners may find scope to push rates above last done.”