VLCC Owners Struggle Despite Recovery in Demand

Press Release
Monday, March 25, 2013

The market continues to struggle, and Drewry's latest Tanker Insight report saw the Drewry Tanker Earnings Index suffer a further decline in February.

Weak demand hammered freight rates on major routes, especially for the larger vessel segments. The impact of weak rates was amplified by high bunker prices, which, for some operators, again translated into negative earnings.

Drewry’s Earnings Index for dirty tankers plunged by 66% to 14.2 during the month. This pulled the wider Tanker Earnings Index down by 52%.           
                                                                                      
Weakness in eastern demand due to the Chinese New Year holidays kept chartering activity in the Arabian Gulf relatively quiet. Similarly, despite increased demand from the Caribbean, activity in West Africa declined. This was largely because of weak European demand as a result of refinery maintenance and reduced shipments to eastern markets.

Rates for VLCCs on the benchmark Arabian Gulf-Far East route declined by 10 points to WS33. Similarly, Suezmax rates on the West Africa-U.S. Gulf route declined by 12%, leading to a sharp dip in earnings because of rising bunker costs. The shale oil boom in the US has reduced U.S. import demand for sweet crudes from Africa, in turn depressing Suezmax transatlantic trade.

Drewry predicts that the demand for VLCCs will primarily be driven by imports from the Far East in the near term. Although Asian countries receive most of their crude oil from the Arabian Gulf, the increased demand for light sweet crude, particularly from China might support the growth in chartering activity in West Africa.

www.drewry.co.uk
 

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

Tanker Trends

Pirates Approach Tanker in Bab El Mandeb

The U.S. Navy Maritime Liaison Office in Bahrain (MARLO) has advised that on or about 12:30 UTC on 14 April, the Master of an oil tanker reported being approached by a white-blue skiff in position 12.

Shippers Turn to Equity Markets as Sector Eyes Recovery

Shipping companies are turning to equity markets to fill a growing funding gap, betting that investors hungry for decent returns will provide capital to a sector

YPF Tenders to Buy Fuel Oil for June

State-run oil company YPF launched its second fuel oil tender in April, this time to buy two 50,000 metric ton cargoes (some 375,000 barrels each) to be received

Finance

India's Reliance Q4 Sales Rise

Indian energy company Reliance Industries Ltd posted nearly flat fourth-quarter profits, in line with estimates, as a slimmer margin in its oilrefining business offset higher revenue.

Schlumberger Announces Q1 Results

Schlumberger Limited (NYSE:SLB) today reported first-quarter 2014 revenue from continuing operations of $11.24 billion versus $11.91 billion in the fourth quarter of 2013, and $10.

New sanctions threats as Ukraine stalemate goes on

A day after an international deal in Geneva to defuse the East-West crisis in Ukraine, pro-Russian separatists vowed not to end their occupation of public buildings

 
 
Maritime Contracts Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | 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: 0.1134 sec (9 req/sec)