Aframax freight rates for East Coast Mexico-USGC runs drop to record low $3.04/mt

Freight on the Aframax East Coast Mexico-US Gulf Coast journey fell to an record low $3.04/mt Thursday, beating the previous record of $3.24/mt, hit June 20.

S&P Global Platts began assessing the East Coast Mexico-USGC route November 2, 2015.

“Those are rough numbers,” a shipbroker said after word was heard in the market of a fixture done at Worldscale 80, or $3.04/mt.

Houston Refining booked the Victory Venture at that level for an EC Mexico-USGC journey, loading a 70,000 mt crude cargo July 11.

The Aframax market has been battered by falling production in Venezuela. A PDVSA union source said production in the Orinoco Belt fell to 700,000 b/d from 1.3 million b/d in June, or slightly more than one fully laden Aframax a day, a substantial reduction in activity for the region.

The shaky political and economic situation in Venezuela also saw fewer imports of diluent from the US Gulf Coast and Worldscale rates on Aframaxes fell to levels not seen since early December 2016.

The broker said the shipowner would probably depend on possible demurrage to make up for low daily earnings. Demurrage in the Gulf of Mexico is $18,000/d, according to a market source, who added that the “next best option is to sit there and wait for a rebound … but who knows when that happens.”