Strong tanker market extends peak season high earnings

April 28, 2015 11:33 am Published by

In the first quarter of 2015, tanker earnings for crude oil tankers have climbed to new strong levels, with averages not seen since 2008, according to a BIMCO release.

The demand for crude oil tankers remains high even though the winter months are far behind. Following the winter peak season of 2013-14, crude oil tanker earnings collapsed and remained low during spring, before rebounding over the summer. In the winter peak of 2014-15, this has not been the case. The market appears to have kept the momentum going, keeping the crude oil tanker earnings at a high level, the release said.

The average earnings for VLCCs were around $ 51,000 per day in the first three months of 2015. That is 76 per cent higher as compared to the first quarter of 2014, where it was around $ 29,000 per day. For Suezmaxes, earnings were at the same level, around $ 50,000 per day in 2015 as compared to around $ 31,000 in 2014. As regards Aframaxes, the difference between the two years was a bit smaller, however, still noticeable with around $ 40,000 per day in Q1 2015, up from around 29,000 last year.

Mr Peter Sand, Chief Shipping Analyst at BIMCO, says: “The strong winter market for crude oil tankers was in line with our expectations. But on top of that is this extended run of strong earnings that proves the window of opportunity is still open as a result of very advantageous fleet growth levels for all crude oil tanker segments.”

Steady earnings with limited fleet growth

Although the steady demand for oil has played its part in this year’s high rates, there is another more substantial factor in play. When one looks at the fleet development from the previous years, it is clear that the fleet growth for the three crude segments has been low. For VLCCs, the average monthly fleet growth in 2014 was only 0.8 per cent on a year-on-year basis. For Suezmaxes, the number was 1 per cent. In comparison, the year-on-year numbers for 2013 were 4.6 per cent for VLCCs and 6.8 per cent for Suezmaxes.

For Aframaxes, the numbers were even better. A decrease of 0.6 per cent in 2013 compared to 2012, followed by another drop of 2.6 per cent in 2014. A reduction of the fleet has shifted the supply and demand curves and it is safe to say it has contributed to keeping the earnings at the level one sees today, the release pointed out.

“BIMCO expects crude oil tanker supply growth at 2.2 per cent in 2015. This is a three-year high. Fortunately, it’s still a level that should see healthy earnings for crude oil tankers throughout 2015, all other things being equal”, adds Mr Sand.

 

Source : Exim News Service – London, April 27

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Euro 69.59 68.48

As On 27 April, 2015

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