Petrobras has fixed two VLCCs on long-term charters at healthy rates as the period charter market cools on the back of reduced floating storage demand.
Market sources said that after talks with tanker owners for period deals this month, Brazil’s state-owned oil firm eventually selected Euronav and Neda Maritime as its counter parties.
Tanker players who followed this business said Euronav’s 314,000-dwt Simone (built 2012) was chartered to Petrobras for two years at $48,500 per day. The deal is understood to include an option to extend the hire for 11 or 12 months.
The ship will be delivered to the charterer after completing its current voyage for Tanker International, the pool operator founded by Euronav.
The Belgian tanker giant declined to comment. However, chief executive Hugo De Stoop told a recent earnings call that one of its non-eco ships was chartered out for two years.
Lykiardopulo-controlled Neda fixed its 319,000-dwt Aragona (built 2012) to Petrobras on a 24-month charter, with an option for a year's extension.
Both Simone and Aragona are not fitted with scrubbers.
Alibra Shipping, a London-based brokerage specialised in period deals, suggests the prevalent two-year rate for a VLCC is $47,500 per day.
Tanker market players said Petrobras is seeking to time charter another two VLCCs at lower rates. TradeWinds has approached Petrobras for confirmation and comment on this.
April was one of the busiest months in recent memory for the time charter market, with oil majors and trading houses rushing to fix short charters of less than 12 months for floating storage demand.
VesselsValue recorded at least 70 period charters for VLCCs, suezmaxes and aframaxes last month.
But charterers are showing much less appetite this month, as the oil contango has narrowed sharply amid signs of demand recovery.
"The contango is not supportive of putting a ship into floating storage for the moment.. . We are not seeing a rush of more floating storage," Navig8 Group’s research director Paul Marsh said in a recent webinar.
With major producers cutting crude output and a gradual relaxation of lockdown measures in many countries, oil market players believe the coronavirus-triggered oversupply might have been past its worst point.
Alphatanker said in its weekly note: "Bearing in mind current relatively flat crude oil futures prices, and associated prevailing unappetising economics (at least from a charters point of view), we project that unless crude market fundaments shift significantly over the coming weeks…the VLCC time charter bonanza for storage is over for now."
