Splash 247: VLCC spillover anticipated in another hectic week of tanker trading

16 March 2020

Poten & Partners concentrated on where all these newly fixed supertankers are likely heading in its most recent weekly report.

“[T]he intended destination of the vessels also catches the eye,” Poten observed. According to its own data, 10 of the 25 VLCCs booked are destined for the US Gulf, while four are going west, most likely to Europe. Another 10 VLCCs are fixed to discharge at Ain Sukhna, the entry point of the Sumed pipeline, which transports crude oil through Egypt from the Red Sea to the Mediterranean. This crude will most likely end up in Europe.

“None of the spot VLCCs have been fixed to Eastern destinations. This is a clear sign that the Saudi’s are targeting Western clients with additional volumes, in direct competition with Russia. So far, our sources indicate that 11 of the 25 vessels have been confirmed, while the other 14 remain on subjects,” Poten stated.

It is not only the Saudis who have increased fixing activity. Other charterers have also taken in more VLCCs. Poten records indicate 92 fixtures last week. The average number of VLCC fixtures per week for 2020 year-to-date is about 50, which is similar to the weekly averages in recent years.

“It is unlikely that this high level of fixing will be maintained in the coming weeks because global oil demand remains still quite dire,” Poten warned.

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