The VLCC market has staged a strong rebound in recent days, boosted by healthy tonnage demand in West Africa and the Middle East Gulf.
Clarksons Platou Securities assessed average spot earnings of modern VLCCs at $9,900 per day on Thursday, up 27.5% since 22 April.
Market sources observed the biggest rate gains in the West African market, where charterers rushed out to fix May-loading cargoes.
“VLCCs feel like they have woken up, especially in West Africa, coming thick and fast,” a commercial manager said. “We should see a little splurge.”
Tanker International data showed ExxonMobil tentatively booked TMS Tankers’ scrubber-fitted, 297,000-dwt Solana (built 2010) to ship West African crude to East Asia at Worldscale 41.5. The loading date is between 15 and 18 May.
Similar deals were fixed at about WS 36 on 22 April.
The Baltic Exchange said spot VLCC earnings on the West Africa-China route reached $8,861 per day on Thursday — a one-month high.
Brokers said the optimism was spreading into the Middle Eastern market, with Opec+ poised to hike crude production from next month.
In a recent meeting, Opec and their Russia-led allies confirmed that they will increase output by 600,000 barrels per day (bpd) in May, 700,000 bpd in June and 841,000 bpd in July.
India, the world’s third-largest crude importer, has been registering record numbers of Covid-19 infections and deaths in recent days.
But anecdotal evidence suggests the country’s crude imports have yet to be affected by weaker demand prospects.
Indian refiners might not significantly reduce their running rates amid buoyant export demand, with recovering oil demand in other regional economies, Platts reported.
There is also speculation that some countries could restrict the entry of vessels that have recently called at Indian ports to control the spread of coronavirus.
“Some shipping capacity could be caught in the Covid disruptions, and that would likely tighten vessel supply in the Middle East,” a tanker owner said.
But most analysts believe the overall tanker markets will not show substantial improvement until summer, as oil destocking in OECD nations is not yet finished.
The Baltic Exchange estimated average suezmax earnings at $885 per day and aframax earnings at $1,571 per day on Thursday. Both readings were far below operating costs.
