Tanker second-hand vessel prices near record highs.

The conflict in the Red Sea has driven longer ton miles for the tanker industry throughout 2024, and last week, fresh Houthi vessel attacks claimed the lives of three crew members, injuring several others, and ultimately leaving the Bulk vessel “True Confidence” abandoned. The deaths are a fresh reminder of the risks taken when travelling through the Red Sea and may drive further avoidance moving forward further reducing vessel supply as they re-route via the Cape of Good Hope.

“Three ship crew killed in Houthi vessel attack, likely to continue driving avoidance of the Red Sea”.

Other factors leading to greater ton miles, which also constrain vessel supply, were in focus last week as OPEC+ extended their 2.2mbd voluntary output cut through Q2 2024. With the OPEC+ volumes remaining subdued, greater supply has originated from Brazil, Guyana, and the US, generally adding to the average industry ton miles, vs cargoes from the Middle East, in turn locking up supply and supporting higher fleet utilization.

On a week-over-week basis, the Crude tanker market gained across vessel segments, as strong demand boosted spot rates, with reports of very strong three-year time charter rates and second-hand vessel values remaining exceptional. The ongoing supply/demand fundamentals have been reflected in the second-hand vessel market, with new record prices for a second-hand Suezmax vessel set last week at around USD 99m.