The cost of sending crude oil from West Africa to North West Europe on Suezmaxes has dropped to a four-month low on strong export demand to the East on VLCC vessels, sources said.

The WAF-UK Continent Suezmax route, basis 130,000 mt, was assessed at $7.53/mt Tuesday, a near four-month low since the route was assessed at $7.22/mt on September 13 last year, according to S&P Global Platts data.

There have been a number of fixtures at this level, including Shell, which was heard to have Sonangol Kabinda on subjects at w72.5, which equates to $7.53/mt, for a WAF to UK Continent stem with February 28 loading.

Petrogal was also heard to have Meltemi on subjects at w72.5 for a 130,000 mt cargo from West Africa to Portugal with February 23 loading.

Crude output from West Africa has been reduced in the last year by militant attacks on pipelines in the Niger Delta, but currently only the Forcados grade remains under force majeure.

There has been strong buying demand from Asia for heavy Angolan crude and VLCC exports to the East have been the cause of the weakness in the Suezmax market, sources said.

There have been 37 VLCC stems fixed out of West Africa for February loading dates, compared with 35 for all of January. February 10-20 dates in particular have seen 19 cargoes fixed against 12 in the same period last month. This hollowing out of the February loading program has led to a softening in Suezmax rates, and shipping sources said rates could drop further if VLCC demand remains strong into March.

Source: Platts