13NOV2019 - NEWS - Tanker Sale and purchase market spikes

The October spike in VLCC earnings added impetus to the sale and purchase market, but IMO GHG concerns weakened VLCC contracting.

The tanker market enjoyed a once-in-a-lifetime spike in spot freight rates in September and October 2019. Driven by a perceived shortage of VLCCs unsullied by connection to the Chinese or Venezuelan companies and those on the US OFAC sanctions list, charterers scrambled for tonnage. Rates rocketed from the low US$20000s/day to reports of US$30000/day, even reaching US$420000/day in one case. Ultimately, these extraordinary freight rates did not materialise, the fixtures failing before being confirmed. But freight rates plateaued at a firm US$100000/day, lifting VLCC values and cascading down through the sectors.