March st. earnings of. be in the West Africa. much too. is, of the fleet. let s look

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1 SUEZMAX STACKED AGAINSTT THE ODDS Even best spin doctors would struggle to create some positivity into earnings of currently beleaguered crude tanker market. The Suezmax sector in particular has suffered a pretty dire time of late. With winter season traditionally being strongest time of year for earnings,, it is a worrying tale that in fourth quarter of 2012, TD5 earnings averaged a mere $13,500/day compared to 2012 average of $16,750/day. Earnings did manage to briefly climb above $25,000/day in pre Christmas holiday surge, but come New Year, levels were eroded on an almost daily basis. On several occasions slow speed earnings hovered around or even below fixed operating costs. It was refore some relief lastt week for ownerss who were fortunate enough to be in fixing window when a sudden charge in demand from West Africa allowed earnings to recover back into high teens. But alas, it looks like spike has been short-lived with peaking at WS66 early this week, before softening back at close. The Freight Forward market expects TD5 earnings for 2013 to be around $8,250/ /day. Ouch! The culprit of stuttering market? The oversupply of Suezmax fleet coupled with reduced demand from US for West African grades. Whilst we can t do much too influence US oil demand requirements for light crude, let us look at supply of Suezmax fleet. It is well documented that Suezmax orderbook is, toger with VLCCs, highest growth sector of all tanker segments. Currently 64 Suezmax are on order, that s 14% of existing fleet of 472 vessels. Yes, that growth is strong, and yes it appears excessive given age profile of fleet is very young over 40% of tradingg fleet is less than 5 years old and re are few potential scrap candidates. However, let s look for positive p - of those 64 vessels on order, we believe about 10 are being built as DP2s for specific timecharter equirements such as Petrobras shuttle operations off Brazil. Such charters are 15 year contracts at reportedly huge premiums over standard timecharter (yy need to be to justify considerable purchase price involved). The huge investmentt by both owners and timecharterers suggest it is unlikely such vessels will ever come to trade on or influence spot market. So we are suggesting that whilst ree is no disguising that Suezmax fleet is young and plentiful, it is perhaps not n quite as large as a quick glance at statistics would suggest. 1 st March 2013

2 CRUDE Middle East Anor reasonably busy week for VLCC s, but yet again availability continued to swamp demand and Owners fought hard amongst mselves to lead to as low as WS 31 East and WS 17.5 West. We are roughly half-way through march programme now, so re is enough volume to come to alloww for some modest upward potential if charterers keep pushing similarly...but that s a big if. Suezmaxes queue around block for f any cargoes moving to West, to complete irr round-trips,, but found little to go for. Rates fell to under WS 30 West, and to WS 52.5 East, and look set to remain bottom hugging over coming period. Aframaxes had already come under pressure last week, and this week that converted into a nasty dip to 80,000 by WS 72.5 for Singapore withh no prospect of an early turnaround given wealth of available tonnage. West Africa It was all looking quite good (in relative terms) for Suezmaxes here, but Charterers quickly realised that all y had to do was to withhold, and quiter second half of week quickly undermined Owners confidence, and fell back to 130,000 by WS 555 US Gulf andd WS 57.5 for Europe. Now that y have regained control, Charterers will be loa to rebuild momentum, but will be tempted to cherry pick bargains on offer which may eventually turn tide again. VLCCs move up to early Aprill now, and stay hog-tied to those in Arabian Gulf as contenders are almost exclusively sourced from East 260,000 by WS 33.5 was seen to China,, and down to US$3.2 million for East Coast India discharge. Mediterranean Aframax Ownerss thought that things weree about to turn in ir favour as enquiry became more plentiful, and consistent. A feww vessels n failed subjects, cargo flow stalled, andd windoww of opportunity n closed. Rates remainedd largely unchanged at 80,000 by WS 80/82.5 cross Med as a result. Suezmaxes played out in tandem with West Africa - initially stronger at up to 140,000 by WS 75 from Black Seaa to Europe, but n quieter with easingg to a little under WS 70 by weeks end. There was still reasonable demand from Med to East and up to t US$3.2 million was seen for China discharge. Caribbean Aframax Ownerss kept ir plate spinning for longer than predicted, aided, and abetted, by bad wear disruption, and lack of ullage. Rates kept within a 70,000 by WS 112.5/117.5 range through week, and may stay ree for just a little longer- or until disruption eases. VLCCs were quietly picked off, and Charterers managed to find one or two weaker links to bring to Singapore to just under US$4 million mark with US$ 3.6 million reported to West Coast Indiia. No collapse likely though, given limited ownership inn region. North Sea _ Steady for Aframaxes on Cross UK Cont milk-run at around 80,000 by b WS 87.5/90, but a little extra cream for those able to trade in ice, as colder wear took hold. Rates from Baltic moved higherr to 100,000 by WS 80, and should consolidate. c Suezmaxes saw very little and hovered at around 135,000 by WSS 50 to states with around US$ 2.8 million available to Singapore. S VLCCs got odd knock to US$ 3.4 million for Singapore with around US$ 5 million askedd for houndpoint/s South Korea movement.

3 East Anor busy week on LRs although previous week's hype has not quite been repeated. 55,0000 mt Naphtha AG/Japan is upto W125 and looks like y could move a little furr. 65,000 mt Jet AG/UKC is now at US$2.15 million but also looks likely to nudge higher. LR2s have seen a large clear-out off early window and are starting to move now. 75,000 mt Naphtha Ag/Japan now at W87.5 and 90,0000 mt Jet AG/ /UKC at US$2.45 million. The MRs have tightened up significantly this week with tonnage clearing out, as a result have risen. TC12 has firmed with 35x135 being fixed, but post this fixture WS 120 has been fixed. East Africa continuess to hover around WS 200, with Owners saying y will not consider fixing below this level. AG to UK Continent has not been fixed this week, however US$ $1.675 Million was on subs as an option. The shorthauls have been ticking over, withh US$ 300k paid for Iraq deliveries, with a tight position list for 1st decade of March, Owners remain confident,, but enquiry levels have gone off boil. In North Asia market Owners have managed to build upon freight gains made last week spurred on byy paucity of tonnage available for hire. Rates for Korea / Singapore are now up around US$ k level for those fortunate enough to find firm tonnage. Due to lack of MRs Charterers have been forced to take next best thing LR1s and on occasions LR2s for MR cargoes. Rates for se voyages vary; some are close to parity with MRs whilst ors are considerably higher depending on load dates. The Market in and around Singapore regionn has also had an active week with promptt tonnage being fixed away, re has been a big draw of productt into Chittagong that will result in some ships being out of market for an extended period of time. Singapore / Australia voyages are also poised to tick up marginally with an outstanding market order loading around mid- to March dates still uncovered fixing rate is expected settlee at 30 x WS 195 level. Mediterranean Leisurely paced enquiry in Mediterranean and with plenty of available tonnage have been gradually sliding downwards on handy's. The market has been CLEAN PRODUCTS West steadys along whilst East blossoms fixing 30 x WS Cross Med on approved tonnage for latter part of week with activity focused primarily in West/central Med and notably busy for Naphtha. Lifting s of Gasoil from Blackk Sea have had a slow start to March and with no Turkish Straits delays re is little pressure for tonnage, so fixing same as Med 30 x WS somee interest at least for MRs, which have firmed slightly through week in line with a more active UKCC market, fixing 37 x WS lvls ta / WS West Africa. Headingg East has been something of a minefield with everything from US$ 900kk to + US$ 1million confirmed, so broadly b considered US$ m Owner and date dependent. Questions still being asked for LR2's loading Naphthaa ex Med destined for Far East, US$ 2.8 m confirmed for sts load with discharge options into Japan. UK Continent A sluggish start too week, a longer list of tonnage and a lack of cargo enquiry supressed to WS 145 basis 37 kt for Trans-Atlanticc runs of UMS however some signs of promise towards weeks end as more cargoes entered market, absorbing a proportion of available tonnage. Premiums into West W Africa remained at plus 10 points for MRs, with smaller clips being arranged around WS 180 basis 33kt CPP. Short S haul remains active; ice lifting s from Baltics commanded 30 x for deliveries to UKC. The cross Continent C motorway recorded lifting s of 30kt for non- ice at around WS 190, flexis traded at around WS basis 22kt CPP. Thee LR's ticked over with WS confirmed for lifting s trans-atlantic and West Africa basis 60kt, furr dischargee options into Red Sea secured around WS m. The pace on LR2s has slowed down, ideas still remain around just shy of 3 million mark for Naphtha N runss UKC/Japan. Caribbean A slow and painful build-up p of tonnage in USG and Caribbean over last few w weeks has seen s take a bit of a battering. The ULSDD arb is now, however, back open, meaning TC14 opportunities have hit market at weeks end and a with e market over tonnaged around 38 x WS have been reported on subs (consider + WS500 for West Africa). For TC3 - Owners ideas are around 38 x WS 120 however this iss largely untested whilst Cross Caribbean movements are fixing at around US$ 320K levels.

4 DIRTY PRODUCTS Handy UKC: A tale of two markets with moving inn opposite direction and at pace it appears! The Continent has suffered from a dearth of cargos, eroding XCont level by 5/10 points as inactivity takes its toll and realign. Tonnage has predictably built this week, withh little on offer to shuffle ship pack and options exist for Charterers at start of next week. Ice requirements have held ex Baltic at a steadier level but as a wholee North West region finishes week with down and sentiment negative greater activity is required next week. MED: The Mediterranean trading week began with a tight tonnage list laying foundation for a rate r rise thatt duly occurred. With E.Med short on shipss cargos ex B.Sea quickly found mselves battling against punchy numbers as early week trading raised bar and subsequent owners cargo expectations. The early 30 x WS 185 served as a catalyst for charterers to enter market en mass in an effort to not be last holding e hot potato in a market reeking of positive sentiment. X Med were dragged upwards on back of a rising B.Sea with two decoupled from traditional 10 point difference as XMed is WS 185 levels. With most cargos in market covered next week is due to be less volatile with dates covered up to 15th. MR In an almost mirrored set of circumstances to that of handy sector, Owner's O withh tonnage in North find mselves battling a wakee of inactiveness desperately trying to hold onn to preciouss world scale points. Levels of 45/135 had beenn spoken of however as at time of writing ree were no signs s of Charterers looking to test se numbers. (A rar telling picture of week in general). Down in Medd however part cargo activity offered catalyst needed in luring a few natural sized stems into market as positions thinned. As an end result have remained steadier in this region however nothing too ground breakingg in terms as volatility is concerned with estimated to t be in 45/ bracket. Panamax Fresh optimism presented p itself upon week opening where freight levels in t US markets rallied into 50/WS 140 region! The stingg in tail however for t Cont/ta route was owing to a distinct lack of activity and numerous vessels already having already committed to ballasting over. In essencee this is a trend that Continent is yet to break out of despite slight relief to position list being offered by activity ex West Africa. Charterers will desperately be looking to lower value of a Cont/Ta movement sub 55/110 bringing yet furr disparity between or load zones.

5 Dirty Tanker Spot Market Developments - Spot Worldscale TD3 VLCC AG-Japan TD5 Suezmax WAF-USAC TD7 Aframax N.Sea-UKC LQM Bunker Price (Fujairah 380 HSFO) Dirty Tanker Spot Market Developments - $/day tce (a) TD3 VLCC AG-Japan -2,250 4,250 6,500 3,500 5,750 9,000 9,250 TD5 Suezmax WAF-USAC +1,500 14,000 12,500 11,500 12,500 11,250 9,250 TD7 Aframax N.Sea-UKC -4,500 5,250 9,750 5,750 7,500 9,750 10,500 Clean Tanker Spot Market Developments - Spot Worldscale TC1 LR2 AG-Japan TC2 MR - west UKC-USAC TC5 LR1 AG-Japan TC7 MR - east Singapore-EC Aus LQM Bunker Price (Rotterdam HSFO 380) Clean Tanker Spot Market Developments - $/day tce (a) TC1 LR2 AG-Japan +4,500 15,000 10,500 10,250 TC2 MR - west UKC-USAC ,250 15,750 19,000 15,750 10,500 7,500 TC5 LR1 AG-Japan +3,750 16,500 12,750 9,500 15,500 13,500 15,000 TC7 MR - east Singapore-EC Aus +1,500 14,750 13,250 14,250 (a) based on round voyage economics at 'market' speed (13 knots laden/12 knots ballast) AV/JCH/JW/JT/slt Produced by Gibson Consultancy and Research Visit Gibson s website at for latest market information E.A. GIBSON SHIPBROKERS LTD., AUDREY HOUSE, ELY PLACE, LONDON EC1P 1HP Switchboard Telephone: (UK) (International) tanker@eagibson.co.uktelex: GTKR G FACSIMILE No: BIMCOM This report has been produced for general information and is not a replacement for specific advice. While market information is believed to be reasonably accurate, it is by its nature subject to limited audits and validations. No responsibility can be accepted for any errors or any consequences arising refrom. No part of report may be reproduced or circulated without our prior written approval. E.A. Gibson Shipbrokers Ltd 2013