An estimated 20% of the VLCC fleet is “relatively restricted for international trade” under ongoing US sanctions, claims Braemar ACM.

The shipbroker calculates that around 156 VLCCs have become “difficult to trade” in the face of sanctions against Iran and Venezuela.

In the other tanker segments the broker says just over a sixth of suezmaxes (74 ships) and about 10% of the aframax/LR2 fleet (128 ships) are impacted.

Braemar ACM said around 77 VLCCs impacted have called at Venezuela in the last 12 months excluding Cosco, NITC or PDBSA-owned vessels.

“Ships with a Venezuelan port call are becoming more difficult to trade,” said Anoop Singh, Braemar ACM’s Singapore-based regional head of tanker research.

“This follows some of the major dirty charterers, including the largest spot dirty charterer, hardening their enforcement of the sanctions clauses that bar the use of such ships this week. More charterers may do so in due course.”

Braemar ACM said another 41 VLCCs affected include those owned by Cosco plus 38 owned by Iranian shipowner NITC.

Ships with a Venezuelan port call are becoming more difficult to trade

Anoop Singh

“A substantial portion of the internationally trading ships owned by Cosco became difficult to trade following the US sanctions on Cosco’s subsidiaries two weeks ago,” said Singh.

“Although a few have started to work privately and at a discount to the market. These ships have a limited market of charterers who can trade them and terminals that will accept them.

“This of course adds to the NITC and PDVSA owned fleets that have been on limited or storage trades thanks to the longer-running US sanctions.”

Braemar ACM says the impending introduction of IMO 2020 is also contributing to the scarcity of large tanker tonnage.

“Close to 1.5% of the VLCC fleet is in shipyards fitting scrubbers, as of the start of last week,” said Singh.

“Another 6% still waits to leave for a retrofit job, though we expect some of these to delay that where possible.”

Meanwhile, the number of tankers in floating storage off Singapore has swollen to 35 VLCCs and three suezmaxes, from 22 and nil at the end of June 2019.

“Most of this fleet is storing LSFO, though Iranian oil and contaminated Urals is also tying up some,” added Singh.

In terms of how long the strong tanker rates with last VLCC FFAs for TD3c printed at $164,000 per day for the fourth quarter in late trading Friday.

“For Cal 2020 the paper market is pricing freight at $12.6 per tonne which works out to a rel-atively sanguine $46,300 per day at today’s HSFO price basis a Baltic vessel,” said Singh.

Tanker rates at highest-ever level

Analyst Joakim Hannisdahl, head of research at Cleaves, said tanker spot rates have surged to their highest rate on record, amidst a perfect storm of US sanctions on Chinese shipping, avoidance of vessels trading Venezuela, the attack on tankers in the Middle East and Typhoon Hagibis.

VLCC rates topped $300,000 per day last week.

"But let’s not forget that the surge is also supported by strong fundamental factors, and that our forecast from July was for VLCCs to reach $81,000 per day during 4Q 19," he added.

"How long current spot rates will last is mainly in the hands of politicians, but we are still optimistic on the fundamentals.

"The orderbook is at its lowest level since 1997, US exports continue to surge and the IMO 2020 sulphur regulations should positively impact the market balance in a myriad of different ways."