Global shipping rates surge: VLCC rates hit $48,171/day in February

Shipping rates for Very Large Crude Carriers (VLCC) have reached their highest level since November 2023, rising 3.5% month-on-month to $48,171/day in February, according to data from the Centre for Monitoring Indian Economy (CMIE).

The VLCC, with a capacity of up to 320,000 deadweight tonnes, has been the primary vessel for global crude oil transportation. Conversely, Aframax and Suezmax rates experienced a decline during the same period.

The uptick in rates is attributed to increased oil trade, impacting larger vessel categories. Aframax vessels, with a capacity of around 120,000 deadweight tonnes, and Suezmax tankers, with a capacity of 180,000 deadweight tonnes, witnessed a decrease.

The Suez Canal, crucial for connecting Europe and Asia, faced disruptions due to tensions in the Red Sea region, prompting vessels to take longer routes around Africa.

The United Nations Conference on Trade and Development (UNCTAD) highlighted the economic implications of these disruptions, emphasizing the threat to global supply chains, potential delays, higher costs, and inflation.

Moody’s Investor Services suggested limited inflation impact, citing low demand and ample ship availability. Port Watch data indicated a declining trend in Suez Canal trade volume as of February 20, 2024, raising concerns about prolonged disruptions affecting global shipping and trade.

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