Riverside Tanker Chartering ©
Riverside Tanker Chartering ©

Tropical oil freight rates reached record heights in 2022 with limited evidence to indicate which direction they will trend in 2023, according to Riverside Tanker Chartering, UK.

“In normal times, we would have expected the recent decline in bunker fuel prices to be reflected in the spot rates but as demand for space remains high, prices have yet to correlate,” the independent shipbroking company wrote in its December 2022 report.

“Only charterers time-chartering tonnage out of the region are net benefactors of lower fuel costs. Long-haul palm freight rates continue to demand a premium over the Pacific and Indian Ocean clean petroleum products (CPP) trades as shipowners look for an incentive to leave the area.

“Chemical and stainless steel space seems to have finally found a level, with part cargo space being more readily available and, in some cases, difficult to fill,” Riverside wrote.

“This could be partially due to speciality and smaller parcels slowly migrating back to tank containers following that sector’s freight correction, coupled with an easing of delays and port congestion in hub ports due to Covid restrictions, particularly in China.”

In terms of freight from the South America region, Riverside wrote that the big driver on medium range-sized tonnage at the end of 2022 had been the Atlantic CPP markets, with key routes such as the US Gulf to Brazil round trip yielding upwards of US$60,000/day for a medium range vessel.

Riverside said in its report that since the signing of the United Nations-brokered export grain corridor deal in July 2022, around 730,000 tonnes of sunflower oil had been exported from Ukraine.

The deal was extended for 120 days on 17 November but a viable “plan B” was still not in play further forward.

“Rail and road logistics, even though increased, still come with their own issues preventing a massive upscale, and shipments via the Danube River remain as they are since there are no large-scale investments being made in the region.”

Riverside wrote that effective 1 December, crude oil tankers passing the Turkish Straits had to present a letter from their Protection & Indemnity (P&I) clubs listing the vessel, cargo and voyage details, and mentioning that the voyage was covered by their insurance.

“This is the Turkish answer against more and more ‘dark’ vessels taking huge risks” exporting Russian crude oil.

The EU and UK banned seaborne imports of crude oil from Russia on 5 December and will also ban the import of refined fuels from Russia on 5 February.

The bans were expected to lift already high freight rates, Riverside said.

“Add to the mix the International Maritime Organization’s introduction of greenhouse gas emissions controls (EEXI + CII) in January [2023] and we think the best way to describe the year ahead is “unpredictable”.

Riverside brokers vegetable oils, molasses, tallow, biodiesel and feedstocks, chemicals and lube oils.