Euronav sprang back into the black in the final quarter of 2018 as tanker rates hit the highest level in two years.
The seasonal upswing pushed earnings from the world’s largest public crude tanker owner ahead of expectations on Wall Street.
Paddy Rodgers, chief executive of Euronav, told TradeWinds: "The VLCC market has come back with a bang.
“If we take our VLCC earnings from November to last week we have earned over $43,000 per day – that’s back to levels we last saw in 2016.
“The year ahead will be dynamic but one where we see the opportunities outweighing the challenges”
The company reported a bottom line profit of $1.2m for the three months to the end of December, against the $19.4m logged at the same stage in 2017.
Adjusted net income of $15.2m beat the $14.3m Bloomberg consensus. Core operating profit of $124m trumped the $114m forecast.
Rodgers said the VLCC trading performance in the period offered an important signal on the structure of the large crude tanker market.
“VLCC freight rates trading at rates not seen in the last two years demonstrate an already tight balance between tanker demand and supply,” he said.
“The factors impacting the crude tanker market are very dynamic and likely to remain so for the foreseeable future.
“The fundamentals such as oil demand, ton mile expansion and vessel supply remain on an improving trajectory that should be reflected in a healthy rate environment.”
Euronav said rates popped in the quarter as the typical seasonal rise was augmented by returning OPEC barrels, rising US exports and record Chinese imports, driven by the 35% fall in the price of crude during the period.
“Chinese imports hit 10m barrels per day for the first time in November and December, it said.
“US China trade tensions have largely bypassed oil markets as US crude exports to China have diverted to similar ton mile destinations, e.g. South Korea, Japan and Taiwan. More recently direct US crude exports to China have restarted.”
