Global Tanker Rates To Rise

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  • global tankers Q4 freight, earnings to rise as demand strengthens
  • increased OPEC+ output key to higher freight
  • slow ship demolition to cap gains
  • sustained recovery still elusive

Global tanker rates are likely to recover in the fourth quarter of 2021 as an easing of coronavirus-related lockdowns pushes up demand amid declining imported stockpiles and rising energy prices, but slow scrapping and ample supply of ships will cap gains, says an article on SP Global.

Nine-month high

Asian VLCC freight is currently hovering around a nine-month high, having breached above the key 40 Worldscale points mark for the first time since early January. “Tankers are cyclical and so from current dismal levels, the only way is up. The question is when and how much,” Ole-Rikard Hammer, an Oslo-based analyst with Arctic Securities said.

Oil demand to increase

Oil demand may increase strongly in the coming months as vaccinations in emerging markets catch up with developed nations, he said. The gap between oil demand and freight volumes is large and inventories are falling rapidly, he added.

Average spot VLCC earnings

UK-based consultancy, MSI forecast daily average spot VLCC earnings during the fourth quarter at $19,000, taking into account voyages to China from the US and the Persian Gulf, compared with losses of $400 in the previous quarter. It forecast the LR2 earnings on the Persian Gulf-Japan route to double quarter on the quarter to $12,000.

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Source: SP Global

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