Oslo-listed Hunter Group is predicting a big jump in demand for VLCCs as crude oil consumption and production rev up for the rest of 2021.
The VLCC company points to Energy information Agency (EIA) forecasts of global oil demand surpassing the 100m barrel per day (bpd) mark in November as a key indicator.
The agency also believes there will be an all-time high of 103.4m bpd reached by December 2022.
To service this demand increase, global oil production would need to ramp up significantly from today's levels as inventories are rapidly reduced, the Arne Fredly-backed shipowner argued in its first quarter report.
Positive signs
"This bodes well for oil tankers as around 25% of oil production is seaborne," Hunter said.
With Opec+ expected to reverse most of the group's 7m bpd cuts this year, this would mean another 140 VLCCs are needed, if all the oil was exported from the Middle East, the shipowner has calculated.
This compares well with the 27 VLCCs and 13 suezmaxes expected to be delivered during the remainder of 2021, Hunter added.
Neither is Hunter daunted by the likely return of the Iranian tanker fleet to trading.
The vessels would be easily absorbed, the shipowner believes.
And the company said "massive scrapping pressure" would be caused by the elderly tankers being used to "circumvent" US sanctions suddenly having little prospect of alternative employment.
Profit cut back
Hunter reported net profit of $2.6m in the first quarter, a slump from $11.8m in the same period of 2020.
The company's four tankers brought in revenue of $12.5m, down from $20.8m in the same period of last year.
Average daily earnings for the fleet were $29,650 per day.
This splits into $21,000 for spot ships and $34,400 for time-chartered vessels.
Hunter said industry benchmark spot rates in the quarter were $9,000 per day.
Daily operating expenses for the company are $5,785 per day.
So far in the second quarter, Hunter has booked 91% of days at an average of $24,700 per day.
The spot figure is $18,150 for 65% of ship days, with time charter rates at $26,050.
"Deeper market fundamentals, as implied by the continued increase in the oil price, continued to improve significantly," the shipowner said.
