Charter Rates Boost for Tanker Owners

Monday, December 10, 2007
Oil tanker owners are celebrating one of the industry's most notable turnrounds after charter rates for some vessel classes multiplied around seven times in the space of a few weeks. Owners of Very Large Crude Carriers (VLCCs), capable of carrying 2m barrels of oil, have been chartering their vessels for as much as $150,000 a day in the past two weeks, against only just over $20,000 in early November. The spike results mainly from industry fears about the effect on tankers of the strong market for shipping dry bulk cargo, where owners can earn up to $180,000 a day chartering out the largest, Capesize, ships.

Owners of single-hull tankers - due to be phased out for environmental reasons by 2010 - are increasingly converting them into bulk carriers, reducing the supply of tankers. The concerns have come just as many customers are seeking to ship oil to replenish depleted inventories. Market conditions are most beneficial for operators that concentrate on the short-term spot market, chartering out their vessels on a voyage-by-voyage basis, instead of agreeing long-term charters with customers such as oil majors.

Two Oslo-based owners - Frontline, operator of the world's largest tanker fleet, and US-listed Nordic American Tanker Shipping - are heavily exposed to the spot market. Nordic American currently owns 12 Suezmax tankers, carrying 1m barrels of oil each.

Some owners that charter their vessels out on a long-term basis have also benefitted, according to George Saroglu, chief operating officer of Athens-based, New York-listed Tsakos Energy Navigation. Many of his company's long-term charter agreements included an element linked to the spot rate.

However, there are questions about how long rates can stay at present levels. Saroglu said he expected similar market conditions for the next six to eight weeks, while conditions after that would depend on the severity of the northern hemisphere winter. Fearnleys, an Oslo-based tanker broker, says in its weekly report that conditions have already become more uncertain. Source: Financial Times

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

WTO Rules Against Argentina Licensing Rules in Row with US, EU, Japan

A World Trade Organization (WTO) dispute panel ruled against Argentina on Friday in a 2012 case brought by the United States, European Union, and Japan against

Odfjell 2Q Results In Line with Expectations

Chemical Tankers had an EBITDA of $24 million, compared with $17 million in the first quarter. Improved utilization with only minor interruptions of trade. Time-charter results were up by 10%.

Second Tanker Waits to Load Oil at Libya's Reopened Port

A second tanker is waiting to load oil at Libya's Es Sider port, state-run National Oil Corp (NOC) said on Thursday, as the country's biggest crude export terminal

Education/Training

LCS MCM MP Puts Navy Closer to Fleet Implementation

NSWC Panama City hosted a two-week demonstration in July that verified Sailors' ability to conduct maintenance on the Littoral Combat Ship's Mine Countermeasure

Drum Cussac Trains O&G Supply Entrepreneurs

Drum Cussac said it is helping Tanzania's budding entrepreneurs cater to the requirements of the international oil and gas companies operating in the country, as

VSTEP Delivers FMB Simulator to Danaos

Danaos Corporation purchased a NAUTIS DNV Class A FMB Simulator and Instructor Station for training of its fleet members.  The simulator will be delivered and installed

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0963 sec (10 req/sec)