Greece's Okeanis Eco Tankers has become the latest owner to fix out a VLCC on a term contract as uncertainty increases in tanker markers.
The Oslo-listed company said it had entered into a time charter with a leading international energy company for either the 319,000-dwt Nissos Anafi (built 2020) or sistership Nissos Kythnos (built 2019) for three years.
There are no extension options, but the ship choice is down to Okeanis.
The charter will generate about $17.5m of gross annual revenue and will start in mid-May, paying $52.5m over the three years.
The rate equates to about $48,000 per day.
The company has eight new VLCCs, plus seven suezmaxes and aframaxes.
VLCC owners have increasingly been seeking period cover, usually for about six months, for some ships, despite booming spot markets, with rates still topping $200,000 per day on Monday.
"This is a substantially longer deal and given the longer-term risk on the tanker demand (collective output cut and prolonged inventory drawdown cycle once demand stabilises), we see this deal a no-brainer," Fearnley Securities said.
It estimates that with an $86m newbuilding cost and debt of $57m, Okeanis will recoup nearly the entire equity paid on the vessel over the contract term.
Following the deal, it now has three VLCCs left in the spot market.
Outlook uncertain
Owners have been seeking cover because there is big uncertainty over demand due to the coronavirus and a potential end to Saudi Arabia's price war with Russia.
Crude is being stored in large quantities at cheap prices, and this could hit VLCC usage when inventories start being drawn down later in the year.
Last week, TradeWinds reported that Oslo-listed Hunter Group reportedly fixed another of its new VLCCs out on time charter.
European brokers said the 300,000-dwt Hunter Disen (built 2020) has been taken for 18 months.
The newbuilding is set to fetch $60,000 per day in a deal with Trafigura Beheer.
Last month the Norwegian company said it had fixed three sisterships, Hunter Atla, Hunter Saga (both built 2019) and Hunter Freya (built 2020) for six months at $80,000 per day.
DHT fixed out six VLCCs on term deals last week, and ADS Crude Carriers also booked a veteran VLCC at $69,000 for six months.
