After years in the doldrums, due to a glut of ships and soft demand, tanker rates have been strengthening in recent months helped by firmer bookings and slower fleet growth.
Rates have accelerated sharply this month as oil traders also eat up capacity.
Big shipping groups like Frontline, Tsakos Energy Navigation and DHT Holdings have seen their share prices surge this month, helped by the overall positive market momentum.
Average daily earnings for VLCCs have risen to over $84,000 a day, from around $63,000 at the beginning of the year - not far off levels of over $100,000 a day seen before the tanker market slump in 2008.
Industry players say rates to hire vessels for longer periods - known as time charters - have risen by a few thousand dollars a day in the past week to over $40,000 a day, and are almost double the level at the same time last year.
With the wave of time charter bookings in recent days, rates are likely to rise further, market sources say.
Many of the ships currently being deployed for floating storage are older and less fuel-efficient vessels, which oil companies are less keen on using to transport crude. At least three are over 15 years old. By using older vessels, oil traders have been able to hire VLCCs for less than $40,000 a day.
Tanker owners have also preferred to trade their more modern ships rather than opt for floating storage as vessels normally deteriorate when kept stationary.
On top of rate rises, using older vessels for storage is seen as a boon for tanker owners. |
