The tycoon’s Ship Finance International secured $16m for the 149,834-dwt Front Glory (built 1995) last week.
“Not too long ago ships of this age would be destined for the breakers torch, and so this is a strong price when we consider where the demolition market is today, although with firm freight market conditions the rewards for buyers of ships of this vintage are clear to see,” said Clarksons Platou in its weekly report.
It is not just suezmaxes where older tankers are seeing a spike in prices.
In June the 306,300-dwt British Progress (built 200) was one of three 15-year-old VLCCs to be sold at $36.6m each.
EA Gibson noted in its weekly report the price of a VL of that age is up by $3.5m since the end of June and the same ships are up by a “staggering $10m” this year.
Despite this positive mood, Gibson says there are reasons to be cautious, with Middle East refining capacity expansion potentially weighing on crude exports and the NITC fleet likely to hit the market before Iranian oil.
“Moreover, China, the world’s second largest economy is faltering and analysts expect lower economic growth as the country faces a more challenging path ahead,” Gibson researchers wrote.
“The obvious impact could dent commodity demand. If VLCC rates come off for a sustained period of time, asset values may start to stagnate or decline.Yet, China still has strategic reserves to fill, which could offer a critical lifeline in the face of waning domestic demand."
It added: "Asset values, whilst well below 2008 highs may therefore be nearing their peak."
