The market remains steady during a week of global volatility
The tanker market has remained stable this week, with earnings staying high despite ongoing geopolitical uncertainty. Suezmax and VLCC vessels equipped with scrubbers are currently trading at $40,000 per day, according to Fearnleys, reflecting strong demand and limited fleet availability.
Looking ahead, market fundamentals suggest that rates could rise further. The peak season for Atlantic exports is approaching, and China's crude oil inventories are low, increasing the likelihood that Chinese refiners will seek crude from non-sanctioned suppliers. Fearnleys analyst Fredrik Dybwad points out that this — combined with slow fleet growth and increased Atlantic oil production — could drive rates up in the coming period.
Compliant fleets benefit from crude oil sanctions
At the same time, sanctions on the shadow fleet are altering crude oil trade patterns in a way that benefits compliant tankers. Frontline CEO Lars H. Barstad noted that major importers like China and India are increasingly turning to compliant suppliers, which boosts demand for conventional tonnage.
"Many major crude oil demand centers, such as China and India, are now sourcing from compliant suppliers in West Africa, Brazil, Guyana, the United States, and even the North Sea. This marks a significant shift in market behavior." – Lars H. Barstad, CEO, Frontline (via ShippingWatch).
With few new tanker deliveries expected over the next two years, fleet availability remains constrained. The distancing from sanctioned oil, the extension of trade routes, and the demand for compliant vessels continue to create favorable conditions for tanker earnings.
Source: Fearnleys, Shippingwatch