Play all audios:
Shipping busts can be even more exciting than shipping booms. When spot rates crash, debt comes due, vessels are arrested, bankruptcies pile up and vultures swoop in. But not all shipping
collapses are so action-packed. Sometimes things never devolve into total crisis mode. Sometimes the market gets stuck in limbo — like tankers are now. Tanker rates have wallowed at or near
historic lows throughout 2021, weighed by oil inventory destocking, COVID-struck demand and a stubborn aversion to scrapping older ships. The market is “the worst this business has seen for
more than 30 years,” conceded Svein Harfjeld, co-CEO of DHT (NYSE: DHT) on his company’s quarterly call on Wednesday. According to Clarksons Platou Securities, pre-2015-built very large
crude carriers (VLCCs, tankers that carry 2 million barrels of oil) and Suezmaxes (tankers that carry 1 million barrels) were both earning just $6,900 per day as of Thursday. Rates for
pre-2015-built LR2 product tankers (with capacity of 80,000-119,000 deadweight tons) had collapsed to $5,600 per day, down 75% month on month. Yet there has been no wave of distress tanker
sales or bankruptcies, as seen in past slumps. Tanker owners in the current downcycle had pared their financial leverage over the past decade and refilled cash cushions on strong rates in
late 2019 and early 2020. TO CONTINUE READING THIS ARTICLE... ALREADY HAVE AN ACCOUNT? SIGN IN CREATE A FREE ACCOUNT No payment required NEED HELP? CONTACT US