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

Tanker Trends

Scorpio Tankers Receive 7 More Newbuildings

Scorpio Tankers Inc. say it has recently taken delivery of seven newbuilding vessels as follows: STI Madison and STI Park, LR2 product tankers, were delivered

Greek Owners CPP Charter Out Three Tankships

Capital Product Partners L.P. (CPP) an international diversified shipping company, says it has secured time charter employment for the M/T ‘Avax’, M/T ‘Agisilaos’ and M/T ‘Alkiviadis’.

Knightsbridge Closes Vessel Acquisition Transaction

Bermuda-based Knightsbridge Tankers Limited announced that it has closed the first stage of its vessel acquisition transaction. Knightsbridge has issued 31 million

Education/Training

BHP Billiton Communities and EWB Provide Support to 5 Students

BHP Billiton Sustainable Communities and Engineers Without Borders Support Students in Sustainable Development September 16, 2014 Five university students

TWC Funds Training of 195 Mariners at San Jacinto College

Texas Workforce Commission (TWC) informs that its Chairman, Andres Alcantar, recently visited the San Jacinto College maritime training center to present a $368,

Maritime Academy Awarded DHS Grant for Arctic Training

Maine Maritime Academy receives $450,000 grant From U.S. Department of Homeland Security for ice navigation and maritime first responder courses for the Arctic Maine

 
 
Maritime Careers / Shipboard Positions Maritime Standards Navigation Pipelines Pod Propulsion Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction 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: 0.1272 sec (8 req/sec)