Floating storage bookings continue to rise globally
As many as 25 very large crude carriers (VLCCs) were booked for floating storage during 1 February-30 March, according to shipping data obtained by Argus, as crude demand and prices plummet from a combination of the Opec+ battle for market share and the coronavirus pandemic.
According to the data, vessel delivery locations include Singapore, the US west coast, the US Gulf coast, South Korea and the UK. Roughly half the fixtures are for six months, while most others range between two and four months. Three of the fixtures are for one year.
Chartering rates for those VLCCs under 15 years old have been $70,000-80,000/d, although a few fixtures have been done as high as $120,000-135,000/d as supply tightened. Older VLCCs have typically achieved rates of $40,000-50,000/d.
A total of three Suezmaxes had also been booked for floating storage by 30 March, two at a rate of $55,000/d, according to the data. Additionally, a lone MR rate was reported at $28,000/d for a 2007-built vessel.
The rush of floating storage opportunities has come as the global crude market has become oversupplied by roughly 20mn b/d, according to Ridgebury Tankers chief executive Robert Burke.
Although most of the floating storage opportunities have been limited to VLCCs, increased opportunities for smaller crude tankers and clean tankers are likely in the near term. During an online Capital Link International Shipping Forum panel yesterday, Burke said Ridgebury has received floating storage offers for its Suezmaxes, while Tsakos chief executive Nikos Tsakos said his company's Aframaxes have received floating storage offers. Additionally, tanker owners at a separate panel said increased clean tanker storage opportunities were likely in the near future.
Clean and dirty tanker rates will receive upward pressure from increased floating storage in the near term because it will tighten tonnage supply.
By Michael Connolly
source: Argus Media
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