VLCC rates may have halved from the start of the year but ship owners should see the situation in context, brokers told IHS Maritime.
Rates for the benchmark Gulf-Far East route averaged Worldscale 39.14 or USD39,000 on 14 August, a fall of almost 20 points from 31 July, when rates averaged W56.04 or USD57,865/day.
In January, when tankers were being booked to store oil in anticipation of oil prices recovering, daily rates were USD80,000.
A Singapore-based broker told IHS Maritime, “Rates today are still profitable. If you like at this time last year, daily earnings were USD15,000 and bunker prices were over USD600 a tonne.
“Today, owners are getting USD40,000 a day and bunkers are costing about USD260 per tonne in Fujairah. It is just that daily earnings weren’t like the USD80,000 earlier this year, when the oil contango resulted in several tankers booked for storage.
“However, oil prices have continued falling so traders aren’t stocking up on oil. Rather, they’re clearing out old stocks and releasing tonnage into the market as such tankers are no longer needed for storage.”
Freight rates have slipped as the decline in oil prices deters trade.
Brent prices have fallen to USD48.59 per barrel for October delivery, nearing a six-year low.
Another Singapore-based broker told IHS Maritime, “The only customers fixing VLCCs are the refineries, because they need oil to produce clean products.”
No Gulf-Far East fixtures were reported on 14 August while on 13 August, Maran Tankers Management fixed out Maran Thetis and Maran Thaleia for W41 and W37.5. Maran Thetis was fixed to Unipec while the charterer of Maran Thaleia was not revealed.
A daily note from Singapore-based Strait Shipbrokers said, “Unless the charterers start working September stems in earnest, we may see the owners fixing lower and lower, giving up point by point, till they get support for a tranche of cargo enquiry.”