Owners and analysts believe today’s agreement between Tehran and six major nations will not prove particularly disruptive to the booming tanker sector, despite the lifting of restrictions on one of the largest VLCC fleets on the water.
One leading owner told TradeWinds the outcome of increased oil flows, balanced against the arrival of additional ships would be “ring fenced or neutral”.
For NITC, the lifting of the sanctions would be "fantastic", allowing the owner to get its fleet back to work.
While NITC has around 40 VLCCs to its name, 17 are commercially trading and not all of the others will hit the market together, Citi says.
Its analysts dismiss the lifting of sanctions as a 2016 non-event for the tanker cycle, suggesting only four NITC VLCCs would enter the spot market.
NITC in numbers
Of the NITC fleet, 23 VLs are currently being used for storage, of which eight are past their third special survey date, the bank’s numbers show.
Of the remaining 15 that could begin trading, Citi notes eight have their third survey date soon.
Adding in the fact NITC tankers will be used to transport domestic oil, the analysts argue that the net addition from the lifting of sanction is four VLCCs in 2016.
“With four VLCC’s representing less than 1% of the world fleet, we believe the impact to be inconsequential to rates,” analysts led by Christian Wetherbee said.
Distracting from the story
“Similar to the contango/storage thesis that permeated the tanker news cycle earlier this year, we think that the current Iran debate ultimately is a distraction from the fundamental bull thesis on tankers,” they wrote in a report issued last week.
“We estimate that current orderbook and global crude production expectations indicate a balanced vessel supply and demand of around 29 incremental vessels exiting 2016, with current indications for a net of around five vessel incremental deficit in 2017.”
Spring for stocks
Michael Webber of Wells Fargo says the lifting of sanctions is a near term positive for tanker stocks, based on the knee-jerk reaction alone.
“More volumes! Yay!” Webber quipped in a report.
In the medium term he says the deal is a net negative for tankers as the NITC fleet returns but in the long term he sees the development as positive for both tanker owners and the LNG sector.
