VLCC spot rates averaged their highest level in 12 years during the second quarter, but prospects for a repeat are bleak.
Norwegian investment bank Fearnley Securities calculated the level as $84,000 per day over April, May and June, the best since 2008.
But rates are hovering around $20,000 per day this week.
Fearnley said numbers had been "fighting gravity" to even keep at that mark, as July exports from the Middle East Gulf trend lower than June, which was itself an 18-year low.
Storage headache looming
"Admittedly, the 80 to 90 VLCCs coming back from floating storage/congestion in the next few months might tip the situation, but regardless we have been positively surprised as to how long owners has been able to hold their heads up, all things considered," analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
VLCCs from the Middle East to South Korea were pegged at $19,400 per day on Thursday, down 3.5% from Tuesday and 60% month-on-month.
Clarksons Platou Securities said VLCC earnings had weakened out of the US Gulf.
"Overall, average VLCC earnings declined to $23,800 per day," added the firm, which is the investment banking unit of shipbroking giant Clarksons.
Owners' resistance
Brokers said owners had put up some resistance on Wednesday after charterers tested the waters with low offers.
"The lack of enquiry across the board will likely continue pulling earnings lower going forward," Clarkson Platou said.
For suezmaxes and aframaxes, a tonnage overhang suggests rates are not going "north" any time soon, Fearnley added.
"Also, we are now seeing pressure on secondhand values, especially for the older vintages where S&P activity in Q1/Q2 reflected strong spot earnings," the firm said.
The investment bank said values could fall between 5% and 10% across the board over the summer.
Suezmaxes were assessed at $7,290 per day on Thursday, down 7.8% from Wednesday and 60% from a month ago.
Aframaxes were attracting rates of just $3,142, off 7.4% and 75% respectively.
