February 7, 2020 | By Blake Stasa and Semi Assimakopoulou
Ever since Gaddafi was overthrown, Libya has struggled to export oil anywhere close to its 2007 levels (around 1.8m bbls/day). The moment Libya slows or ceases to export, available ships begin to pile up in the Mediterranean, which often results in the immediate collapse of the local market. We can observe this in today’s market.
In the graph below, you can see the number of daily reported Aframax fixtures out of Libya for December and January (based on data from The Signal Ocean Platform, using the Signal Maritime company’s account).
What’s striking is that there were no fixtures for Aframax vessels loading in Libya in the second half of January 2020.
There were no Aframax fixtures loading in Libya in the second half of January 2020.
With Libya being the third largest source of cargoes in the Mediterranean (after the Black Sea and Ceyhan), this lack of fixtures starts to lengthen tonnage lists, and that has an immediate impact on rates.
In the graph below you can see the how the total number of commercially available spot Aframaxes has changed over the last half of January 2020 as compared to rates:
*Vessel supply considers commercially available vessels only.
Now that the Mediterranean market has stabilized, the other Aframax markets are, in turn, oversupplied with tonnage.
Things are always changing: during the preparation of this article, the Aframax market has collapsed. It is always impressive to see how the freight market is well responsive to changes in local supply.
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