Power Shift

Global oil demand growth slowed markedly in 2024, rising by just 0.8% year-on-year – less than half the growth rate recorded in 2023, according to the IEA Global Energy Review. A significant factor behind this slowdown was the accelerating uptake of electric vehicles (EVs). In particular, road transport oil demand in China fell 1.8% year-on-year amid rapid expansion of EVs and natural gas-powered trucks. Unquestionably, China’s EV market has undergone a remarkable transformation in recent years. In 2024, the country accounted for about two-thirds of global EV sales, with battery electric vehicles (BEVs) making up 27% of passenger cars sold — far ahead of 13% in Europe and 8% in the United States. Government policies have fuelled this growth by supporting both automakers and consumers alike, along with a major expansion of public charging infrastructure. Overall, China’s EV sales surged by 38% year-on-year, reaching 11.2 million units. Interestingly, while BEV sales continue to dominate, their growth is slowing, while plug-in hybrid electric vehicles (PHEVs) are becoming increasingly popular. PHEVs accounted for 43% of China’s total EV market in 2024, up 10% from the previous year. This is notable because, although PHEVs reduce fuel consumption, they still rely on gasoline when the battery is depleted, meaning some level of gasoline demand will persist in China despite strong EV growth.

In the United States, EV sales expanded in 2024, benefiting from federal incentives under the Infrastructure Investment and Jobs Act (2021) and the Inflation Reduction Act (2022), which together awarded $23 billion in loans and grants. Yet, US EV adoption remains modest compared to China. BEV sales reached 1.3 million units in 2024, while hybrid vehicle sales, including plug-ins reached 1.9 million units. The US EV market is now facing political headwinds, however. In January 2025, Trump signed an executive order titled “Unleashing American Energy,” which revoked Biden-era targets aiming for EVs to make up 50% of new car sales by 2030 and instructed federal agencies to halt the distribution of funds for EV development. The Trump administration is also attempting to freeze a $5 billion government EV infrastructure program.

In Europe, the EV market saw a decline in 2024. BEV sales fell by 1.3%, with a slump in Germany being a key factor, where the phase-out of subsidies, weak consumer confidence, and high purchase costs weighed on demand. PHEV sales declined even more sharply, falling 3.6% year-on-year as consumer preferences shifted toward fully electric models. Europe’s EV sector also faces a degree of regulatory uncertainty. While the EU has set a zero-emissions target for new passenger car sales by 2035, Germany pushed for an exemption allowing vehicles powered by synthetic e-fuels, raising concerns that political pressure from member states could lead to further amendments or delays.

Looking ahead, China is expected to continue dominating the global EV market, driven by supportive government policies and technological advances. This trend will likely reduce China’s domestic oil transport demand further and with it seaborne crude imports. The situation in the US, however, remains more uncertain, where political developments pose potential challenges to EV growth. Although legal battles and existing funding commitments may prevent a reversal of EV incentives, the uncertainty is likely to slow the pace of adoption. The latest Trump’s announcement to impose a 25% tariff on car imports could also have negative implications for EV sales. Meanwhile, EV adoption in Europe is expected to remain challenged in the short term by economic headwinds, reduced subsidies, high costs, and infrastructure constraints. Overall, the global EV market is poised to reshape the energy landscape, but it is clear that the pace and extent of this transformation will vary across regions, with the US and Europe potentially facing a slower decline in road fuel demand than previously thought.  

Global Oil Demand Growth by Sector (kbd)

Crude Oil

East

It turned out to be a disappointing week for VLCCs in the AG as rates softened daily due to a lack of activity for the second decade. Owners’ resistance weakened as a few market quotes exposed the larger amount of availability not helped by an influx of relets. We expect this softer sentiment to carry over into next week although we are probably close to the bottom of this cycle. Today we are calling AG/China WS57 and AG/USG WS31.

For Suezmaxes, Basrah/West remains flat around 140 x WS57.5 via C/C. There are still a few keen players around and it seems unlikely to move very far over the next week. Rates to head East remain under some pressure, though seem to be holding steady for now. Market levels today are approximately 130 x WS112.5.

It has been a quiet week for Aframaxes in the AG. That said, levels remain steady as the tonnage list has not yet fully replenished. Rates for TD8 hover around 80 x WS150 level, but are more likely to slip into the 140s than move north of the 150 mark heading into next week.

West Africa

VLCC freight rates are under pressure here as activity levels were very limited this week especially on runs to the far east. Tonnage remains balanced for now and we would expect some fresh activity next week to show if the downturn in the East will affect the sentiment here. However, owners will have been cheered to see the pickup in the USG and hope that has a positive impact on the rest of the Atlantic. Today we are calling WAF/East in the region of WS60.

Suezmax markets in WAF are steady, though there is a firmer feel to this market. Expect some of the pressure to ease as ships come free over the weekend. For TD20 today, we estimate rates to be around WS102.5 but for the right run, you may get a touch under this if you have early dates.

Mediterranean

TD6 remains steady and last done levels continue to be repeated, for longer runs charterers have succeeded in chipping away at the rate by removing options. Expect last-done levels to be repeated at WS130. Libya/East has a few keen players around but there is a hesitancy to go East at the moment, rates today are around $6M.

In the Med, Aframax charterers who rolled their cargos until Monday had an unwelcome surprise when a deluge of other, more attractive, cargoes entered the market. A list which already looked bare was soon stripped further with cargoes in the early month position left in peril. With no time to drag ballasters from the North Sea, a Ceyhan voyage was concluded at WS137.5 on an older unit to start the ball rolling, and it rolled much further with WS150, 175 and 200 levels being done for both Libya and Ceyhan runs. A peak of WS240 was achieved for one of the shortest XMed voyages with CPC/Med runs paying WS212.5. As weather and port delays continue and with many ships having already left the Med to benefit from the States, we can expect rates to remain firm in the medium term before an inevitable rebalancing after mid-month.

US Gulf/Latin America

VLCC owners are enjoying a firmer market from the USG as charterers are struggling to cover their enquiries as rates push up, and the lack of available tonnage should ensure this current upturn continues into next week. However, with April almost completed we might be close to the top if next week sees less fresh activity. Brazil export also enjoyed a busy week but rates were adversely affected by the lack of WAF activity and a softening in the East. Today we are calling USG/China $8.5m & Brazil/China WS57.5.

Local Aframaxes went for a ride this week, up nearly 40 points on the back of a hot Med market. With the Med remaining firm, expect fewer ballasters and a tighter local tonnage list until the Med cools off.

North Sea

Finally, some movement in the North Sea mainly thanks to neighbouring markets being active. Levels picked up and are now sticking to the WS120s, not exactly rocketing but in comparison to what we are used to these are some decent gains. The list is tighter than it was with a lot of ballasters heading to the more lucrative Med and States markets, but enough tonnage is still being recycled for local business. There could be a bit more upside to this market next week, but I can’t see it running away with itself as the Med has.

Crude Tanker Spot Rates (WS)

Clean Products

East

Slow start, busy middle and a quiet close. This sums up the sentiment across the LRs this week. TC1 came off and bottomed out at 75 x WS150, however, a quick retest and back to WS155 for the end of the week. West similar story with $3.95m on subs but expect next done to start with a 4. LR1s saw more action on the short haul stems this week. However, like the LR2s off the front end the list is tight, and we are missing stems. TCT needs retest but assess at 55 x WS160 and UKC at 3.1m levels. Both lists remain tight off front end and even with an expected few quiet days ahead as the cargoes enter next week, owners will hope this is a stepping stone forward.

A flatter feel to the MRs in the AG where the foot has come off the pedal in terms of cargo inquiry and end march dates have now been covered. TC17 saw 25 points shaved off last done mid-week with that run now sitting around the 240 level but expected to come off more with lack of fresh. East and Westbound voyages have seen a handful of prompter ships being clipped away but there leaves very little for owners to get their teeth into.

UK Continent

A week of two halves for the MRs as by mid-week negativity started spreading. But a flurry of cargoes off prompt dates and the smell of any decline in rates evaporated. Owners will now be inclined to at least aim for last done or a bit more so we may be into standoff territory early next week. 37 x WS195 is the last paid ex Brofjorden/TA which would put ARA/TA at 37 x WS190 and WAF at 37 x WS210. The real underlying story for both the UKC and MED has been the massive tonnage displacement in favour of the states and WAF, so any modest change in cargo flow and the mood can change very quickly as the lists lack depth. It is a very finely balanced and sensitive market but going forward we do expect more laden tonnage to arrive from an active USG market.    

Limited Handy enquiry persists. Fresh test required for a XUKC off natural dates. If the Med rates maintain we are likely to see owners keen to get South. The MRs will as usual cap the Handies as most cargoes are still quoted to 30-37, the one clear disparity is the difference between UKC and Med rates so we may see some owners wanting to get ships South.

Med 

What started as a rather unstable week here in the Med Handy market with rates differing has now begun to settle down. 30 x WS275 was the call for XMed on Monday morning but with the list looking tight for end-month dates this soon creeped up a touch. However, with the list lengthening as we enter early April dates levels have started to come under pressure as the week has progressed. We now see rates bouncing around the 30 x WS240-250 levels with BSea in need of a fresh test. Heading into the weekend a handful of cargoes are left uncovered but with tonnage building expect charterers to continue turning the screw. It is worth keeping an eye on the poor weather expected in the Med next week which could cause a few issues with itineraries. 

Finally to the Med MR market where all in all it’s been an active week. The combination of a few Naphtha stems and a tight front end enabled rates to push up in line with TC2 which is where they have now settled. 37 x WS190 is now the call for Med/TA with WAF expected to land at a 20-point premium when next tested. At the time of writing there is little left to cover with a steady finish expected.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

It’s a story of firming markets for owners in both the UKC and Med this week as enquiry has continued to flow. The North continues its recent rally as levels trend upwards and with the Suezmax UKC/east Arb currently not working for FO, it looks as though there may well be more cargoes to feed the market next week. Levels have risen from 30 x WS205 at the start of the week and closing out at the 30 x WS225-227.5 mark. Looking ahead to next week, we expect the list to remain tight and levels to continue their upward trend.

In the Med this week we have seen a more gradual firming of rates as 30 x WS220 took hold before slowly ticking up to 30 x WS225. Here these levels repeated clipping units from a tight list until a forward-dated market quoted cargo finally settled at 30 x WS230 which seemed inevitable. We expect replenishment to provide some additional units early on, but should enquiry match the pace of recent weeks we think the Med has some more room to run.

MR

North owners will be the happier of the two regions this week although levels have firmed in both markets. The list in the North has remained tight for some time as vessels that begin to fall into the fixing window are clipped away quickly. This week levels have firmed from 45 x WS145 to 45 x WS155 on subs by close of play on Friday. If recent weeks’ enquiry is anything to go off, then levels here will likely firm further. This week the Med finally saw a well-publicised fresh test at 45 x WS152.5 for an XMed run. As usual, owners have found the majority of employment via Handy stems and part cargoes which have kept availability tight, and we expect to see levels firm further heading into next week.

Panamax

Another slow week for Panamax owners this side of the Atlantic. Availability is there for charterers to choose from, but this fails to bring enquiry out of the woodwork which may soon cause owners to begin the ballast TA. Ideas for next done we expect to be between the 55 x WS100-105 mark. Over in the USG ideas remain steady at 50 x WS150 as positive sentiment from Aframaxes is so far failing to translate to the Panamax sector. On a positive note for owners, enquiry continues to bubble away under the radar and with multiple vessels opening UKC/Med, the market could see rates firm if enquiry ticks up.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)

wk on wk changeMar 27thMar 20thLast Month*FFA Q4
TD3C VLCC AG-China WS-1059695860
TD3C VLCC AG-China TCE $/day-8,25040,75049,00039,25036,750
TD20 Suezmax WAF-UKC WS7103968587
TD20 Suezmax WAF-UKC TCE $/day7,75043,50035,75030,50030,000
TD25 Aframax USG-UKC WS37183146157140
TD25 Aframax USG-UKC TCE $/day18,75048,75030,00037,75027,750
TC1 LR2 AG-Japan WS-11153164121 
TC1 LR2 AG-Japan TCE $/day-50037,25037,75026,000
TC18 MR USG-Brazil WS25201176144163
TC18 MR USG-Brazil TCE $/day6,75025,25018,50014,25015,500
TC5 LR1 AG-Japan WS-27154181140145
TC5 LR1 AG-Japan TCE $/day-5,25025,25030,50021,25020,250
TC7 MR Singapore-EC Aus WS-16194210186185
TC7 MR Singapore-EC Aus TCE $/day-2,25021,50023,75020,00018,750

(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis

Bunker Prices ($/tonne)

wk on wk changeMar 27thMar 20thLast Month*
Rotterdam VLSFO  +2490488520
Fujairah VLSFO  +3512509530
Singapore VLSFO  +13523510527
Rotterdam LSMGO  +26656630646

Print the report