Lloyd’s List: Owners Eye Brighter Future as VLCC Rate Rises Expected

“The moderate supply of very large crude carriers available for employment in the Middle East Gulf is helping to keep charter rates stable, with imminent rises anticipated on a potential influx of oil cargoes for loading at ports in July. . . . As demand for crude rises, Saudi Arabia is expected to increase crude output in the second half of this year, which could help support the VLCC market. While estimations on the extra output vary between 500,000 and 1.5m barrels per day, a 1.5m bpd increase to meet demand from the Far East has the potential to raise VLCC demand by over 30 ships per year, depending on the destination of the cargoes, said US shipbroker Poten & Partners in its latest weekly tanker report. ‘This could help absorb tonnage from the market and lead to firmer freight rates, however the indecision regarding output has been a bearish signal for freight markets that could sorely use the extra cargoes,’ said the Poten & Partners report.”