MORE operators of suezmax tankers are avoiding transit of the Bab el Mandeb Strait and switching to the Cape of Good Hope route for Middle East to northern Europe and Mediterranean crude oil cargoes.

While crude voyages between the Middle East Gulf and Europe accounted for just 5% of all suezmax-laden voyages during 2023, Vortexa analyst Mary Melton told Lloyd’s List that the additional tonne-miles required to reroute vessels will reduce tonnage availability elsewhere.   

“In a projected scenario of these diversions for northbound transits of crude going from the Middle East Gulf to Europe, this could add 10% to monthly global tonne-miles for suezmaxes carrying crude, Melton said.

“This is because of the significantly longer voyage time, and if vessels are employed on these longer routes this could tighten global tonnage availability.”

Suezmaxes are the tankers most impacted by diversions since they carry the lion’s share of crude oil from the Middle East Gulf to northern Europe or the Mediterranean.

Melton said that decisions about diversions are likely to have been driven by a combination of charterers’ requests and owners deciding to reroute.

“The decision will be based on ties by either the charterer or vessel operator to the US, Europe or Israel, with factors such as war risk premiums, and the appetite for risk on the part of vessel operators. Owners are looking for clauses in charterparties that avoid the Red Sea.”

Should attacks continue in the Bab el Mandeb Strait more suezmax vessels are expected to be diverted.

“The situation is even more uncertain now with the cycle of US/UK-led air strikes and then the Houthi response. For the most part, the only suezmaxes transiting southbound via the Red Sea are carrying Russian cargoes. The risk is perceived to be less risky due to Russia’s geopolitical ties.”

While some suezmaxes are continuing to use the Suez Canal northbound, the majority of these are heading northbound in ballast and are destined to load Russian or Turkish crude for Asia.    

Time charter equivalent rates on the TD23 Middle East-to-Mediterranean route doubled between January 12 and January 19 to $57,039 per day but have been falling since then. As of today, January 25, the Baltic Exchange TD23 index stood at $52,676 per day.

Diverting via the Cape of Good Hope adds some 4,900 nautical miles and between 14 and 16 days to a one-way voyage from the Middle East Gulf to Rotterdam.

Sailing at an average speed of 12-14 knots, the extra transit time will add up to $550,000 to a vessel operator's bunker fuel bill at prevailing prices of high-sulphur fuel oil.

According to Lloyd’s List Intelligence data, eight suezmaxes are heading south off the east African coast destined for either northern Europe or the Mediterranean.       

Suezmax tankers that appear to have been switched from the Suez route include the Trafigura-controlled Marlin Somerset (IMO: 9835850) and Marlin Sicily (IMO: 9835848), which are destined for Santa Panagia, Italy and Rotterdam respectively.   

Other suezmaxes heading from the Middle East Gulf to the Mediterranean or northern Europe include Kyklades Maritime Corp’s Kinyras (IMO: 9320714) and Nissos Sikinos (IMO: 9884033). They are destined for Sarroch, Italy and Fos, France respectively.   

A total of 12 suezmax tankers have been diverted via the Cape of Good Hope from the Middle East Gulf to Europe route since December 16, according to Vortexa data.

Richard Matthews, director of consultancy and research at shipbroker Gibson said that charterers could decide to parcel two suezmax cargoes onto one very large crude carrier to provide better economies of scale, now that suezmaxes are diverting away from the Suez Canal.

"There are also other factors to consider such as a possible change in crude trading dynamics with more Middle East barrels heading east while more west African barrels stay in the Atlantic," noted Matthews.