More Big Tankers, Lower Profits?
The abundance of big tankers, the very large crude carriers (VLCCs) of some 300,000 deadweight tons, makes several analysts express reservations about the projected revenues of the category this year. In 2005 the revenues of VLCCs dropped by 40 percent compared with the "golden" year 2004 when a lack of vessels and the great increase in demand pushed freight rates to extremely high levels. Analysts expect the current trend to continue and forecast an additional decline of profits by 30 percent for the entire year. On the positive side, shipowners are generally optimistic about the market, as daily rates for VLCCs carrying oil from the Middle East and from West Africa come to at least $100,000. This is attributed to the market's seasonal character, because when the summer demand for oil was less, the rates had fallen. Since the autumn, though, when demand again increased with the coming winter, optimism returned.(Source: International Herald Tribune)