Core Petroleum has relet a nine-year-old VLCC in a time-charter deal that underscores profound market weakness, according to market sources.
The US trader reportedly chartered the scrubber-fitted, 319,000-dwt Olympic Leopard (built 2011) from Olympic Shipping and Management for two years at $47,500 per day in March.
But the VLCC was recently relet to Repsol for six months at $24,500 per day, and the deal can be extended by another six months at $29,500 per day.
Olympic declined to comment. TradeWinds has approached Core and Repsol for confirmation.
Clarksons Research estimates the prevalent one-year rate for a scrubber-fitted VLCC at $29,375 per day.
The reported rates suggest Core is willing to take a loss for at least six months, likely reflecting a dim market view.
Storage boost
VLCC earnings jumped to nearly their all-time highs in the second quarter, driven by large floating storage requirements amid an oil price war and the coronavirus-triggered demand collapse.
But spot rates have struggled to stay above breakeven levels in recent months as oil destocking takes place at a slow pace.
Most analysts expect tanker rates to stay low in the coming months, with the Opec+ supply cut and weak oil consumption pressuring shipping demand.
“The oversupply of cargoes in the market buoyed clean and dirty freight rates,” data specialist Vortexa’s senior freight analyst Arthur Richier said. “Fast forward to December 2020 and high earnings as well as high levels of in-transit volumes are but a thing of the past.”
“With demand still some way off from recovering we don't expect oil in-transit volumes to go above 2020 levels in 2021.”
Philadelphia-based Core markets crude produced in the US, Latin America, Canada, West Africa, North Sea and the Middle East, according to its website.
The company claims to trade up to 300,000 barrels per day and supplies refineries in China, Japan, South Korea, India, Latin America, and the US West and Gulf coasts.
Core said it operates and manages 25 to 30 tankers on spot and time charters and is involved in ship-to-ship transfers.
