Herbjorn Hansson believes hostilities in the Middle East Gulf could play out positively for the tanker market as it gears up for a strong year in 2020.
Hansson’s Nordic American Tankers has a fleet of 20 suezmaxes in the water and will pay a dividend of a single cent for the second quarter of 2019, a period it said displayed a “normal seasonal slowdown”.
However, the tanker sector has been shaken this summer by a number of attacks on vessels in the Middle East, including Iran’s seizure of the 50,00-dwt Stena Impero (built 2018) last week.
“The situation in the Middle East may well have a positive effect on NAT,” it said in an update to investors today.
“With a better tanker environment, we expect the NAT dividend capacity to increase appreciably.”
As TradeWinds has reported, tanker traffic has pulled back from the Middle East Gulf in the past month following attacks on the 110,000-dwt Front Altair (built 2016) and 27,000-dwt Kokuka Courageous in June.
Iran's capture of the UK-flagged Stena Impero has also influenced shipping traffic in the area, with GasLog among the firms currently avoiding transiting the Strait of Hormuz.
This week, Evercore ISI analyst Jon Chappell said political tension in the Gulf could provide a boost to the tanker market at a time both the crude and product sectors are on an upward curve.
While Chappell described reduced oil demand forecasts as a “potential red flag” to its tanker market read, geopolitical tension historically provide a short-term boost to rates.
NAT, which refinanced earlier this year, said its suezmaxes earned around $14,500 per day in the second quarter and approximately $20,000 per day across the first six months of the year.
“This is a significant improvement over the same period in 2018,” it said.
“We expect a stronger market in the second half of the year. We foresee that 2019 overall to be better than 2018.
"We also expect 2020 to be a strong year for our tankers.”
The update, which contained a signature running tally of consecutive quarterly dividends (now 88), also included a teaser on potential deals which have been rebuffed.
“In recent months NAT has been contacted by industry players seeking cooperation, indicating that NAT is regarded as an attractive investment opportunity,” it said.
“The main policy of NAT is to treat all shareholders equally. We have advised such interested parties that they may buy shares in NAT.”
