Charterers have continued to exert their upper hand in the VLCC market, with rates cratering on Wednesday.
According to the Baltic Exchange’s VLCC time-charter equivalent assessment, earnings for the largest tankers tumbled by $2,169 to $28,632 per day, continuing a slide that started 10 days ago.
Fearnleys said the market “could get worse before it gets better”.
“Charterers are by and large sitting on their hands,” the broker said, adding that available cargoes in the first 10 days of September will fuel sentiment in the market.
Also fuelling negative perceptions are “doom and gloom chatter increases in volume” which could influence Opec and its allies to stay strong on production cuts.
The planned gradual unwinding is expected to boost VLCCs later this year.
“The picture is not improved by Atlantic volumes being behind the curve. But something has got to give and if VLCC cargoes from the likes of [West Africa] and [the US Gulf] do not materialise then logic dictates that the suezmax segment will benefit,” Fearnleys said.
VLCCs had shot up $11,780 between 13 August and 19 August, hitting $38,670 per day.
But charterers grabbed a hold of the market and have not let go, pushing rates down to current levels.
There was a single VLCC fixture on Wednesday, and it came in at just $18,830 per day, according to Tankers International.
The deal was for the 319,431-dwt Maran Libra (built 2014), with Vietnam’s NSRP taking the ship on for a voyage from the Middle East Gulf to Vietnam in mid-September.
It follows a single — and richer — fixture on Wednesday.
That deal saw Petrobras take on Frontline’s 300,018-dwt Front Gander (built 2023) for a voyage from Brazil to China. It will load in late September.
