Traders are set to load unprecedented volumes of diesel onto very-large crude carriers (VLCCs) from Asia to West of Suez markets in August, a trend that is expected to persist into the following month. Five supertankers—Maran Leo, Sea Lion, Nissos Keros, Nissos Nikouria, and Atherina—have already loaded over 9 million barrels of diesel from the Middle East and India, marking a record level for VLCCs, according to Kpler shipping data.
The use of VLCCs for transporting refined fuels is driven by a price advantage in dirty tanker freight rates compared to clean tanker rates. Analysts from LSEG Oil Research noted that this shift reflects weaker-than-usual demand for crude from Asia, particularly from China, making these large vessels available for other cargoes.
Typically, diesel is transported using medium- or long-range ships with capacities ranging from 300,000 to 700,000 barrels. However, VLCCs, which can carry around 2 million barrels, are now being utilized due to the competitive nature of the Atlantic Basin diesel market. Freight costs for chartering VLCCs on the Middle East-Europe route are significantly lower at $10 per ton, compared to clean tanker costs of approximately $50 per ton.
The five vessels were chartered for August by trading units from Abu Dhabi National Oil Company (ADNOC), TotalEnergies, and Trafigura. While ADNOC and Trafigura declined to comment, TotalEnergies did not respond to requests for information.