Zodiac Maritime has secured front cover for another of its crude tankers, taking advantage of the strong time charter market amid historic floating storage demand.
The London-based operator fixed out the 297,085-dwt Blue Nova (built 2011) to US oil company Hess for nine months at more than $100,000 per day, one of the strongest period charter rates in recent weeks, market sources said.
The ship is reported to be delivered in north-western Europe.
“It’s all about positioning the ships in the right place at the right time,” one source said.
In March, Eyal Ofer-controlled Zodiac chartered the 298,522-dwt White Nova (built 2006) to Koch Industries for six months at $77,500 per day.
Neither ship is fitted with scrubbers, but Clarksons data shows they are scheduled to be installed in 2021.
Zodiac has also secured a six-month charter for the 157,071-dwt Pluto Moon (built 2019) from Vitol at $55,000 per day.
Analysts have forecast at least 10m barrels per day of excess crude during this quarter, due to the coronavirus-triggered demand collapse and an earlier price war among major producers.
With brimming onshore tanks across the globe, the number of vessels required to store crude is expected to exceed the previous peak seen in 2009 and 2010.
Kpler data showed 173 vessels were used to store 145m barrels of crude as of Monday, up 65.5m barrels over the past month.
Great bargaining power
Energy firms and traders have needed to fix vessels on time charters with options for floating storage, giving shipowners great bargaining power.
According to shipbroker Braemar, the rate for a one-year charter of a non-eco VLCC has risen by 50% over the past month to $82,500 per day, for a suezmax by 17.5% to $47,000 per day, and for an aframax by 42.9% to $35,000 per day.
Unconfirmed fixtures show Capital Ship Management’s scrubber-fitted, 320,000-dwt Andronikos (built 2019) was fixed for six to eight months at $125,000 per day and Sonatrach’s 315,800-dwt Mesdar (built 2007) for six months at the same rate.
TradeWinds has approached the ship operators for comment.
“A lot depend on delivery timings and locations ... but I don’t see a typical VLCC time-charter at more than $100,000 yet, with the current paper levels,” said a broker.
In forward freight agreement trading, the second-quarter TD3C contract closed on Monday at $135,384 per day, third-quarter at $48,259 per day and fourth-quarter at $47,783 per day.
Some players suggested the high rates of VLCCs are prompting oil firms to pursue suezmaxes and aframaxes in the period charter market.
Clarksons Platou Securities estimated 136 suezmax and aframax tankers were being used to store crude as of Tuesday, up by 48 ships over the past week. The number of VLCCs used as floating storage has remained at 101.
“When VLCCs get expensive, charterers look for suezmaxes. Now suezmax rates are getting expensive, I think people will next look for aframaxes,” an owner said.
