European crude buyers are seeking replacement barrels, with loading ports and delivery schedules back under review. After Saudi Arabia’s East-West pipeline shut on 11 September, Reuters reported on the 15th suspended Yanbu loadings and cancellations of some September cargoes for Europe. Gulf terminals were meanwhile handling more ships: Vortexa counted 12 vessels loading at Ras Tanura and Juaymah in the week to 13 September, against six or seven a week during the preceding three weeks.
Over the fortnight from 8 to 21 September, those changes reached freight through the amount of ship time needed to deliver a cargo. Tankers carried crude on longer voyages and through transfer sequences, while grain ships faced growing competition from tankers for Panama slots. Dry bulk’s overall decline concealed a firmer Atlantic and a weaker Pacific. The commercial problem is increasingly specific to the cargo’s origin, the ships available there, and the route they can perform.
Wet Bulk
The Gulf of Oman is carrying more of the onward crude trade, at a rapidly rising price. TD34, the Gulf of Oman to China route, moved from WS450 during the first week of the fortnight to WS806.43 on Thursday 17 September. Collection outside Hormuz gives an onward carrier access to barrels that have already made the shuttle passage, but the transfer arrangement consumes additional ship time before the long haul begins.
TD3C, the Middle East Gulf to China benchmark, reached WS1,140 on the same Thursday, equivalent to $1,212,503 a day. Both Bloomberg and Splash caution that TD3C is becoming increasingly theoretical as fewer owners accept the passage and normal Gulf fixing breaks down. TD34 is the more useful operational reference for cargo collected outside the strait, with the shuttle’s cost and timing assessed separately.
Brokerage company Arrow explains the wider tightness through more sea-days per delivered barrel. Long-haul trading and the loss of efficient triangulated voyages absorb capacity, while some owners hold ballast tonnage in the Gulf awaiting clearer conditions. More ships in the region can coexist with a shortage of vessels positioned and willing to accept the next cargo.
The pipeline shutdown adds a fresh change to that pattern. Saudi Arabia subsequently offered transfers off Sohar, while European buyers facing cancelled Yanbu stems sought replacement barrels. A revised loading nomination changes the position from which the carrying ship must arrive and the date on which the refinery can expect delivery. A freight indication on the original route can therefore survive on paper after the voyage it priced has disappeared.
The Hormuz passage itself remains restricted by timing. US air protection for transiting tankers has been reduced to two daily windows, creating another interval between loading and onward delivery. Where a shuttle and a receiving ship must meet, a missed window can alter both vessels’ schedules. The fixture needs to say how the resulting wait is treated, with readiness and instructions recorded while the decision is made.
The period market supplies a different reference for commitments extending beyond prompt cargoes. DHT fixed the 2016-built DHT Panther for three years at $100,000 a day, with an October start, while Clarksons assesses three-year employment around $80,000. These are distinct references: a concluded fixture for a particular ship and a broker assessment. They support testing the cost of longer cover without treating the current spot assessment as the rate that every future voyage will bear.
Fuel adds to the cost of each extra sailing day. Reuters put Singapore very-low-sulphur fuel oil at $878.50 a tonne on 11 September, compared with $433.50 on 1 January. The Baltic’s first weekly dry report in the fortnight identified higher bunker prices as a pressure on capesize sentiment. Cheaper freight on one leg can therefore be offset by higher fuel expenditure over a longer route.
Charterer Lens
- A transfer-based crude purchase needs a combined timetable for the shuttle, transfer, and onward ship. Price the consequence of a missed connection before committing the receiving vessel’s laycan.
- For an escort wait, test arrival and notice of readiness wording before allocating time. Agree how detention provisions, war-risk liberties, or owner’s account apply, and preserve the instructions establishing the window offered.
- When updating fourth-quarter budgets, separate route-length costs from the premium for prompt availability. Refresh that premium as vessel offers change, using period quotes matched to the required ship and employment as a further reference.
Dry Bulk
Capesize freight declined across the fortnight, with the Baltic’s 182 five-route average moving from $57,011 a day on Monday 7 September to $52,315 at the end of the second week. The Baltic Dry Index closed at 3,370 on Friday 18 September, against 3,507 the Friday before, then recovered to 3,399 on Monday 21 September. Atlantic demand strengthened towards the latest weekly close, and Pacific rates appeared to find a floor.
The basin split matters more to an October fixture than the combined average. C5 (West Australia to Qingdao) moved from the low $18s during the first week into the mid $16s during the second, as prompt tonnage outweighed fresh cargo demand. C3 (Tubarão to Qingdao) moved from the low $41s to October fixtures in the low-to-mid $42s, with some approaching $43. Sustained fixing thinned the Atlantic ballaster list while Pacific charterers retained a wider choice of prompt ships.
China’s ore position provides a reason for caution about further cargo growth. Shanghai Metals Market (SMM) reported 144.33m tonnes at 35 Chinese ports in the week ending 18 September, up 840,000 tonnes. Steel margins remain weak and mills face calls to restrain production, yet Breakwave reports ore imports still up 5.4% year on year. The reported import growth has continued alongside weaker steel conditions and rebuilding stocks.
That leaves a charterer with two different exposures. Prompt Australian requirements face available tonnage and a receiving market carrying more inventory; October Brazilian cargoes compete for a reduced list of arriving ships. Waiting for the capesize average to fall further could improve one negotiation while allowing the other to become more expensive.
Coal also requires separating the consumption outlook from the cargoes moving now. The International Energy Agency (IEA) forecasts global demand up 1.2% this year to 8.94bn tonnes, as expensive gas improves coal’s competitiveness. Its forecast has Indian demand rising 4.2%, while Banchero Costa records Indian seaborne coal imports down 8.1% to 149.8m tonnes in January to August. The different measures and periods support a cautious freight assumption: higher projected consumption alone does not establish the next import stem.
The origins of India’s imports are changing too. Banchero Costa puts Indonesian shipments to India down 18.8% to 53m tonnes over those eight months, while Russian shipments rose 9.4% to 24.3m tonnes. That shift makes the loading port and sailing distance part of the freight assessment, even while total imported volume contracts. The data establish a change in seaborne sourcing; they leave the contribution of domestic supply to consumption unresolved.
Panama is tightening access at the same time. Daily transits fell from 36 to 34 on 4 September and to 32 on 15 September. BIMCO reports bulker transits down 22% year on year since July, identifying competition from tankers serving increased US energy exports to Asia. That competition reaches grain as the US maize and soya bean export season approaches its peak; about 15% of those seaborne exports normally use the canal.
BIMCO expects the restrictions to encourage longer routes and potentially a greater share of exports from Pacific Coast ports. Either response changes the delivered-cost comparison between origins. A Gulf loading programme consequently needs both a canal-access assumption and an alternative sailing estimate before freight is committed, with the cost of reserving or bidding for a slot assessed against the actual vessel and cargo.
Charterer Lens
- Price October Brazilian ore against the reduced Atlantic ballaster list. For prompt Australian cargo, available ships and rebuilding Chinese stocks support a separate freight discussion.
- Panama access belongs in the fixture calculation alongside the delivery window. Obtain the slot cost and diversion estimate together, then agree who carries additional sailing and waiting before the vessel is committed.
- Coal cover needs confirmed import stems, loading ports, and vessel sizes. Changes in India’s sourcing and the different panamax and supramax markets can alter freight exposure even when total imported tonnes fall.
Regulatory and Trade
A change in sanctions exposure could restrict the specialised ships serving Russian energy exports before cargo demand changes. Signed on 18 September, the Lindsey O. Graham Sanctioning Russia and Iran Act requires a review of covered persons and vessels within 30 days. The application of sanctions depends on statutory determinations and waiver powers, making the review relevant to both counterparties and the ships serving them.
The review also precedes the EU prohibition on Russian LNG imports under long-term contracts from 1 January 2027. Redirecting those cargoes requires continuing access to specialised liftings and onward carriage after transfer. Service availability therefore belongs in the assessment of a delivery commitment alongside the destination’s ability to receive the gas.
Alternative routes for other bulk cargoes have their own operating limits. The Swedish Club says southern passages around South America should remain a third-choice option for US East Coast to Asia trades, with current Panama restrictions manageable for most voyages. It warns that developments near the southern Red Sea could make the Suez alternative harder to use, bringing the southern passages into consideration sooner.
That choice changes the voyage’s operating requirements. The Drake Passage brings severe weather and cargo-shift risk; Magellan offers more shelter but narrow channels, strong currents, and reliance on local knowledge. The Club says voluntary pilotage costs depend on charterparty wording and that a charterer’s routing instructions cannot override the master’s responsibility for safety. A diversion estimate needs those requirements priced before a longer passage is selected.
Port labour supplies a nearer decision date for dry cargo. German seaport workers are voting until 1 October on authorising an indefinite strike, after a representative group rejected the latest offer. The vote arrives as Continental tonnage has tightened following fertiliser and grain fixtures. An October discharge nomination therefore carries a possible interruption at the berth, with the treatment of time dependent on the strike wording.
Charterer Lens
- The US review window points to about 18 October. Trace controlling ownership and the service providers required for performance before committing a Russian energy fixture extending beyond it.
- For a southern diversion, establish vessel suitability, pilotage arrangements, and cost allocation before giving routeing instructions. Retain the weather and routeing advice on which the decision rests.
- At German discharge ports, establish which strike events suspend the laytime clock and whether an alternative berth can be nominated. The ballot leaves the eventual operating interruption uncertain.
Different routes, different assumptions
The next correction in freight could come through several mechanisms. More efficient crude movements would release tanker days even without a fall in refinery buying. Lower ore liftings could soften Pacific employment while an already depleted Atlantic position list remained tight. Easier Panama access would shorten some grain voyages and return ships to the market sooner. Each possibility changes available capacity at a different point in the trade.
A single allowance for freight normalisation would conceal those differences. Fourth-quarter cover is better assessed cargo by cargo, keeping the loading origin, vessel position, route, and delivery date visible in the estimate. Where an alternative outlet is available, compare its full delivered cost before the original loading programme fails. Where the route is fixed, retain an explicit allowance for the ship time it now consumes, and revisit that allowance when operating conditions change.
Until next week,
The Voyager Portal Team