Hellenic Shipping News: VLCC Tanker Owners Enjoying Booming Market

05 May 2015: “According to the latest weekly report from analyst Poten & Partners, earnings for 2015 to date on the benchmark AG-East route are significantly higher than during the same period in previous years and most market participants expect rates to remain solid throughout the year, even though there will be seasonal fluctuations. Poten noted that ‘despite earlier expectations to the contrary, world oil demand growth has been relatively strong so far this year. This is in part due to unexpected factors, such as a rebound in European product demand as well as increased growth in India and higher demand for transport fuels in the US. Lower oil prices have also contributed to increasing oil demand’, Poten noted. “Poten added that an additional positive factor for owners of VLCC tankers is the fact that ‘commercial control has been consolidating in fewer hands. At the end of 2013, Euronav agreed to buy the Maersk VLCC fleet. Shortly thereafter, General Maritime, which also had their eyes on the Maersk vessels, bought the VLCC orderbook of Scorpio tankers. This deal was later followed by the merger of Genmar with Navig8 Crude Tankers in 2014. Earlier in the same year, VLCC Chartering was established, bringing together the VLCC fleets of Frontline and Tankers International. These deals have levelled the playing field somewhat, as it gives owners more information and creates more discipline in the market’, the analyst said. “As such, the market remains well balanced and ‘as long as the oil keeps flowing the outlook for the large crude tankers remains favorable’, Poten concluded.”