Tanker rates keep falling, this time to four-month lows.

Monday, the Baltic Dirty Tanker Index fell to 850, the lowest level since 25 September.

That is the same day US sanctioned Cosco Shipping Energy Transportation-linked companies, supercharging rates.

The skid sees VLCCs earning just $26,000 per day in the spot market, down from the $70,300 per day 2020 average, according to Poten.

"After a positive autumn and winter, recent events have resulted in an increasingly pessimistic short term outlook for the Tanker market," fleet valuation and tracking outfit VesselsValue said.

It attributed the drop to the US partially lifting sanctions on Cosco Shipping Energy Tanker subsidiaries last Friday, plus coronavirus fears and the Chinese New Year driving down oil demand in China.

Cosco Shipping Tanker (Dalian), the firm the US Treasury Department removed from its blacklist, controls anywhere from 25 to 30 VLCCs, with 44 under the greater Cosco Shipping Energy Transportation umbrella.

When the sanctions were first announced, charterers fled any Cosco-connected tanker over fears they could be blacklisted, too.

The restricted supply sent the Baltic Dirty Tanker Index as high as 1958 in mid-October, with ships being offered at $300,000 per day, though the fixtures never materialized.

The jump in supply could be short-lived, however, with Fearnleys' Espen Fjermestad arguing in a note that quarantining Chinese ships and scrubber retrofits could take ships out of the global fleet.

"When the dust settles we continue to be constructive on the tanker outlook," Fjermstad said.

"We see the summer being the strongest period this year" with recovering demand, he added. "The back-end of the year is expected to carry the normal seasonality pattern."