Lloyd’s List: Poor Rewards for Suezmax Owners for Pushing the Market Up

“Suezmax chartering on the spot market was busy over the last week but brought little pay-off for owners, who saw freight rates stay stubbornly flat. . . Adding to suezmaxes’ woes over the longer term is the way international crude trade is changing. Fewer light sweet crude cargoes will be shipped from West Africa to the US in the next five years, according to a forecast by the International Energy Agency published today. This is because the US has enough of its own light sweet crude from production in North Dakota and Texas, and so requires fewer imports on suezmaxes from West Africa. The only realistic hope for suezmaxes is an increase in demolition. The good news is that this has been picking up. According to shipbrokers Poten & Partners, six suezmaxes left the fleet during the third quarter, maintaining a good scrapping pace not matched by other tanker segments. ‘This demolition response from the sustained earnings malaise is encouraging, as owners may finally address the supply/demand imbalance,’ said Poten & Partners in its latest tanker report.”