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

Tanker Trends

Ceremony Marks the Construction of 5 American Tankers

General Dynamics NASSCO and City of San Diego Mayor Kevin Faulconer today signaled the start of construction of five American Petroleum Tankers at a steel cutting ceremony for the first tanker,

Britain Loses Europe's Gas Trading Crown to the Dutch

Britain has been topped by the Netherlands as Europe's leading natural gas trading hub this summer, ending decades of British dominance in the sector. Britain

American Maritime Industry Booming Testifies AMP

The U.S. House Subcommittee on Coast Guard and Maritime Transportation today heard first hand about America’s booming domestic maritime industry from Mark Tabbutt,

Finance

Deal to End Lockout at Canada Uranium Mine

Canadian uranium producer Cameco Corp and the United Steelworkers union, which represents 535 workers at the world's largest uranium mine and a nearby mill,

Oil Refiner Bound to Goldman, Deutsche Fee Agreements - NY Judge

CVR Energy Inc is bound by agreements to pay Goldman Sachs Group Inc and Deutsche Bank AG more than $36 million in fees and expenses stemming from billionaire

Short-Term U.S. Energy Outlook

The U.S Energy Information Adminstration have provided projections in their short-term Energy Outlook. The highlights are as follows: Highlights     *

 
 
Maritime Contracts Naval Architecture Offshore Oil Port Authority Salvage 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: 0.1084 sec (9 req/sec)