Two prominent Greek shipowners, a major Chinese firm and one of the world’s largest public VLCC players are believed to have scored profitable contracts with shale oil producer Occidental Petroleum.
The deals mark the US energy company's first major move in the VLCC time-charter market at a time it is developing its infrastructure in the US Gulf.
John Angelicoussis, Onassis company Olympic Shipping & Management and New York-listed DHT Holdings are all understood to have locked VLCCs into long-term contracts.
AMCL, a Hong Kong-based tanker arm of China Merchants Energy Shipping, is also being connected with the business.
Occidental Petroleum has made its move at a time charterers are showing increased appetite for crude tankers over longer periods with IMO 2020 in sight and US crude exports are rising sharply.
The improved sentiment has already been reflected in increased asset prices in the VLCC space and owners are now closely watching the market for further demand from traders and end users to support the rising tide.
Contracts signed
Angelicoussis appears to have secured a large slice of the business from Occidental Petroleum, which was the first charterer to load a VLCC at a US Gulf Coast oil terminal back in 2017.
Tanker market sources say Greece’s largest VLCC owner has locked a modern vessel already in the water, and potentially a newbuilding, into three-year contracts with Occidental.
The rate for trading ship was placed at $42,500 per day, with the potential newbuilding at at $43,000 per day. Both ships have scrubbers fitted.
AMCL is rumoured to have fixed two ships at $40,000 per day for three years. Olympic is believed to have chartered out one of its modern VLCCs for three years at $43,000 per day.
Chatter in the market also linked Lykiardopulo family-controlled Neda Maritime with an Occidental charter but TradeWinds understands this is inaccurate.
DHT’s slice of the pie is different in that sources indicate Occidental is taking a modern VLCC which will not be fitted with a scrubber.
They point to a 2016-built VLCC, of which DHT has four, fixed for three years at $38,000 per day.
It is not thought to be the only period business secured by DHT at a time of rising charterer demand, with P66 fixing another VLCC from the company for three years.
The tanker is said to have been fixed at a base rate of $30,000 per day for three years, with a profit share kicking in at around the $38,000 per day level.
The deals have provided a further shot in the arm for the tanker market, which has seen charterers come to market for longer deals at higher rates this summer.
As TradeWinds reported in May, shipowners Filippos and Andonis Lemos fixed one of their VLCCs to Mercuria for three years at $43,500 per day, the highest rate seen for around four years over that time-frame.
TradeWinds is told subjects have since been lifted on the 319,000-dwt Maria P Lemos (built 2018), and other traders are now said to be seeking to follow suit.
“There is in general an increased interest in period not only from traders but from end users as well,” one top tanker owner told TradeWinds.
Occidental Petroleum and DHT declined to comment when contacted by TradeWinds this week. Angelicoussis, Neda and Olympic have yet to respond to requests for comment.
The period market for VLCCs is presently running at higher levels than seen for spot business, despite tension in the Middle East after attacks on two tankers earlier this month providing a boost to earnings in the past couple of weeks.
Howe Robinson Partners yesterday placed rates for modern eco VLCCs at $31,897 per day, against a year-to-date average of $29,667 per day.
While charterers are keen to lock in tonnage, analysts note there is a wide-spread in VLCC rate forecasts for 2020, which some believe will see the start of a new super-cycle.
Nicolay Dyvik of DNB Markets noted the lowest forecast for VLCC rates next year is $27,000 per day, with the highest at well over $70,000 per day.
Trond Lillestolen, Lucy Hine, Eric Martin and Harry Papachristou also contributed to this article, which has been updated since first publication after new information relating to Neda's involvement became available.
