Since the start of the conflict between Ukraine and Russia, a new breed of Tanker owners has emerged. Demand for Tankers increased, and this has caused Tanker freight rates to rise following a long period of stagnation, enticing new players to enter the market.
Emergence Of New Players
Sanctions on Russian crude oil and clean petroleum products came into force in December 2022 and February 2023 respectively. As a result, this has curbed the trade in Russian crude oil to the West, followed by a shift in trade flow patterns. This led to the emergence of new market players, who were keen to take advantage of the premiums available from carrying sanctioned cargoes, which traditional owners are no longer willing to carry. At the same time, this new entrants to the Tanker market have created a link that has enabled Russian oil to carry on flowing, with very little impact from the sanctions. Furthermore, cargoes have moved away from Europe to destinations further afield, such as China, India and the UAE.
Gatik Ship Management
India based Gatik Ship Management is one of the most interesting companies to have emerged over the last 18 months. A previously unknown entity, the company has acquired and is now operating an astonishing 53 Tankers (37,100- 318,100 DWT) since December 2021, with an average age of 17 years and a total market value of USD 1.5 bn. The majority of these purchases were in the Aframax / LR2 sector, accounting for almost half of purchases at c.49%. This sector has seen the largest jump in values out of all the Tanker sectors. Values for 20YO vessels of 105,000 DWT have increased by c.135% since the start of January 2022, from USD 11.84 mil to USD 27.84 mil.
Fractal Marine Shipping
Fractal Marine Shipping is another new entrant to the market over the past year. Headquartered in Geneva and Registered in the UAE, Fractal are managing the commercial operation of Tankers. The company has put together a fleet of 27 vessels since March 2020, with 26 of these vessels having been bought since May 2022. The vessels bought are between 9 to 14 years of age, with an average age of the vessels purchased being 17 years.
So far this year alone, there have been 43 Tanker sales reported to undisclosed buyers, compared to just nine for the same period last year. These vessels have an average age of 18 years. The favorite of the month for some time has been the MR sector, which has accounted for c.33% of sales to undisclosed buyers this year, followed by Aframaxes/LR2s at c.25% and VLCCs ranking third at c.19%.
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