Looking at the top 10 beneficial owners of Aframax tankers provides some insights into the sector structure. Scorpio Tankers leads the top 10 with 33 vessels (12.89% of the top 10), followed by Bank of Communications (China) with 27 vessels (10.55%), AET with 26 vessels (10.16%), Minerva Marine with 26 vessels (10.16%) and Sovcomflot with 26 vessels (10.16%).

Recent developments among these beneficial owners are noteworthy. AET, for example, has signed a long-term charter agreement for two LNG dual-fuel vessels, signalling a strategic shift towards more sustainable operations. "This agreement marks a significant milestone in our commitment to environmental stewardship," said an AET spokesperson. Such initiatives are likely to influence other owners to invest in greener technologies, aligning with global environmental goals.

Looking ahead, the orderbook data reveals potential shifts in market dynamics. Dynacom Tankers has 16 vessels on order (17.58% of the top 10 investors in the Aframax tanker sector), Navios Maritime Partners has 15 vessels (16.48%), Rosnefteflot has 14 vessels (15.38%), Union Maritime has nine vessels (9.89%), and TMS Tankers has eight vessels (8.79%). These orders reflect the future expansion plans of these companies, indicating a competitive race to enhance fleet capacity and market share.

Navios Maritime Partners has recently reported strong financial results, reflecting its strategic expansion and modernisation efforts. For Q1 2024, Navios reported a revenue of US$318.6M and a net income of US$73.4M. "We remain cautious as this robust maritime environment can change quickly," noted Navios Partners chairwoman and chief executive Angeliki Frangou,"We focus on reducing leverage and modernising our energy-efficient fleet.”

Leading the top 10 Aframax technical managers by number of vessels is Stream Ship Management in the lead with 38 vessels, representing 15.51% of the top 10 technical managers. This UAE-based company is the technical manager of 49 tankers closely linked to Novoship and Sovcomflot of Russia.

This is followed by Scorpio Marine Management with 33 vessels (13.47% of the top 10), TMS Tankers with 29 vessels (11.84%), Minerva Marine with 26 vessels (10.61%), and V Group with 23 vessels (9.39%).

On the commercial control front, the market is equally competitive. Scorpio LR2 Tanker Pool tops the list with 28 vessels (12.12% of the top 10), closely followed by Penfield Aframax Pool with 26 vessels (11.26%), Trafigura Beheer BV with 25 vessels (10.82%), another Russian-linked entity, Gatik Ship Management with 24 vessels (10.39%), and Minerva Marine with 23 vessels (9.96%).

The strategic decisions of these commercial controllers significantly influence market dynamics. For instance, Scorpio Tankers’ recent annual report highlights the company’s efforts to enhance fleet utilisation and expand market presence. "Our focus remains on maintaining a flexible and responsive fleet that can adapt to changing market conditions," the report stated. This approach is critical in navigating the volatile nature of the shipping industry, ensuring sustained profitability.

Volatility in the Aframax sector may not be far away. According to Vortexa’s leading freight analyst Ioannis Papadimitriou, Aframax rates could face further weakening in Q2 2024 due to seasonal factors in the Atlantic Basin and increasing sanctioning activity.

The transatlantic US Gulf-to-Europe crude trade, a significant route for Aframax tankers, saw a 10-month low in utilisation in March 2024. This was influenced by US refinery returns and European maintenance periods, which reduced transatlantic crude flows. The restart of European refineries might provide some support, but high crude inventories in Europe could limit improvements. Furthermore, the widening freight spread between Aframax and Suezmax tankers on this route may push charterers towards the larger, more economically viable Suezmax tankers.

Source: SCORPIO

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	Issue 91 of Robban Assafina (May/ June 2024)