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Tanker rates strengthened last week. We saw the biggest increase in the Aframax rates, which rose by just over 16% last week. We also observed a good drift in the VLCC rates, which increased by just over 10%. This is a very good sign and proof of moderate conditions in the tanker market when the rates remain robust during the COVID-19 outbreak. However, what is more interesting is that in the future, we will see a sharp increase in activity in the tanker market. This is due to Russia rejecting the proposals presented by OPEC at the OPEC + meeting in Vienna last Thursday and Friday. As a result, Russia and Saudi Arabia have now entered into a price war, especially on shipments to Europe and Asia, which are the major markets for them both.

Another aspect is that both countries have lost market share to the shale industry in the United States, which they have subsidized over the past three years through repeated production cuts to keep oil prices stable. This has provided good working conditions for shale producers as they need a high oil price to meet break even levels. As a result of the mood in the oil market we are seeing now, we expect a scenario that will be very similar to what we saw in the period 2014-2016. Then, it was Saudi Arabia that went to a price war against American shale oil and the oil price fell abruptly. Oil traders like Trafigura, Glencore etc. are going to hire tankers to store cheap oil today, that they want to sell later. This will put additional pressure on the tanker fleet. From 2014 to 2016, tank values increased by 40%. Don’t be surprised if we see good increases in ship values going forward. The average yield in the Aframax segment so far this year is $38,839.

Aframax – 12 month TC: $21,500
Aframax – Average spot market rate: $26,235

Dry Bulk:

In the dry cargo market, the capesize segment is still under pressure. This is due to the low demand for goods from Brazil and West Africa. There are many ships currently sailing ballast, which means it will probably take some time before we see any major upswing in the capesize segment. For Panamax, we saw a solid increase last week of 24% in spot rates. More activity in the Atlantic and the Pacific staying strong are the reasons for the rate hike. However, sometime will pass before the dry cargo market is back on for levels.

Capesize 12 month TC: $14,750
Kamsarmax 12 month TC: $12,675



A 22 year old VLCC was sold at $19.m. This underpins the fact that the ship values remain very robust.


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