Crude tanker rates have remained at extremely high levels as market players are optimistic that US sanctions, seasonal demand and the IMO 2020 will keep tonnage supply tight.

While spot assessments on the Baltic Exchange were little changed amid quiet trading on Monday, Dynacom Tankers Management managed to achieve high rates in some shorthaul deals.

The Greek owner provisionally chartered the 300,000-dwt Folegandros 1 (built 2004) to Reliance Industries at Worldscale 330, equivalent to $272,807 per day on a time charter equivalent basis when idle days are excluded, according to VLCC Chartering. The vessel is scheduled to lift from Basrah, Iraq for a shipment to the western coast of India.

A similar deal were done at WS220 last week.

TradeWinds understands Dynacom also tentatively fixed the 150,000-dwt Antiqua 1 to Trafigura on the same route at WS550, with a loading date of 25 October.

The high rate reflected strong market sentiment as well as the prompt loading date, according to brokers. “Madness,” one of them said.

The Baltic Exchange assessed spot earnings of VLCCs on the TD3 Middle East Gulf-China route at $288,589 per day as of Monday afternoon, down $11,802 from the historically high level seen on Friday.

Average suezmax earnings increased by $2,173 to $138,806 per day, while average aframax earnings rose by $2,076 to $60,708 per day.

“It’s definitely quieter…lots of people are pausing for a new direction,” said a London-based player.

VLCC earnings rose by 244.2% last week, suezmax earnings by 92.3% and aframax by 35.3%, according to Arctic Securities.

Many analysts and owners suggested the rally was triggered by the removal of a large chunk of global fleet due to US sanctions on Iran and Venezuela, seasonal demand from refineries, and preparation for the IMO 2020.

Those factors are expected to remain in the market for the weeks to come, creating a robust, volatile rate environment, some of them said.

“$300,000-per-day [for a VLCC] is frankly crazy, and a panic reaction. The tanker markets have a history of short-lived spikes; if it goes up too quickly then it will not last long,” Banchero Costa research head Ralph Leszczynski said.

“That said, I do believe that the fourth quarter will be very strong.”

With many ships scheduled for scrubber retrofitting for the IMO 2020, and Cosco Shipping Energy Transportation – the world’s largest crude tanker owner – not able to trade normally due to sanctions, Leszczynski expects more than 100 VLCCs to be removed from spot trading in the coming months.

“So having [spot earnings of] $100,000-$150,000 dollars per day on the Baltic TD3 in the fourth quarter is very realistic now,” Leszczynski said.