Belgium's Euronav Posts 2Q Loss on Low Oil Tanker Demand

Belgium's Euronav, which provides shipping and storage services for crude oil, swung to a second-quarter loss, it said on Thursday, as recovering demand for oil and easing production cuts had yet to lead to better shipping rates.

The Antwerp-based group posted a loss of $89.7 million for the period compared to a $259.6 million profit a year earlier.

"Improving crude demand and the tapering of OPEC+ production cuts have yet to translate into freight rate recovery," Chief Executive Hugo De Stoop flagged in a statement.

Euronav's shares were down over 3% in early trading.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, cut oil output as the world's demand for crude oil plunged during the pandemic last year.

OPEC+ ministers however agreed in July to boost oil supply from August to cool prices that had climbed to 2-1/2 year highs as demand progressively rebounds.

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According to analysts at Evercore, the impact of increasing global oil exports will probably not be seen until the autumn, at the earliest.

"It's probably time to throw in the towel on any material rate rebound in 2021," the broker said in a note last month.

Euronav also pointed to persistent COVID-19 outbreaks that continued to curb demand, deferring a recovery in freight rates.

These two interlinked factors remain the key variables for oil tanker markets short term, the company said, citing "largely static" tanker market dynamics from the first quarter.

Available tonnage, whilst not increasing, has remained stubbornly elevated in particular in key export markets like the Middle East, the group added.

Last Wednesday, U.S. President Joe Biden's administration urged OPEC+ to boost oil output to tackle rising gasoline prices that they see as a threat to the global economic recovery.

(Reporting by Juliette Portala and Sarah Morland. Editing by Jason Neely and Susan Fenton)