Winter Doldrums

January 15, 2021

2021 starts with poor tanker rates across the board

2021 is not off to a great start. Usually, the winter months are good for tanker rates, but not this year. A review of the daily market rates shows low Worldscale (WS) assessments, which lead to very low TCE (time charter equivalent) earnings. Some earnings, particularly in the crude oil segment, are even dipping into negative territory. VLCCs, Suezmaxes and Aframaxes all show negative TCE’s on one or more of the benchmark routes. Why does this happen and how long can it last? In today’s Tanker Opinion we will take a look at some of the factors that can (temporarily) turn earnings negative. We will also review the drivers for the tanker market for the next six to twelve months.

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