Not Logged In, Login,

Wednesday, December 13, 2017

Freight rates remaining strong

Freight rates remain relatively strong with VLCC fixtures naturally correlating strongly with oil production in the Middle East. The table shows that, despite the increasing number of VLCCs joining the fleet as newbuildings, and although older units are slow to retire, yet with a relatively steady number of monthly AG VLCC fixtures, freight rates have remained strong over the three years 2004-2006. 

 

Year

VLCC fixtures*

Oil prod mbd**

No. of VLCCs

VLCC rate***

2001

94

20.900

428

32,852

2002

78

19.668

427

19,655

2003

98

21.126

433

52,209

2004

106

22.353

453

91,872

2005

103

22.676

479

51,715

2006

104

22.500

494

62,107

*Average monthly AG fixtures

**Middle East oil production - mbd

***VLCC rate AG - Japan 250,000 dwt 

Of course, it is not only the number of fixtures that should be taken into account but also the distances to the destinations. Judging by the Clarksons fixture data, fixtures westwards, which normally would be the longest voyages, do not appear to have increased. Neither does the U.S. or Europe appear to be taking more oil from the Middle East during this period. This means that tonne-miles, the real driver of the market, have been increasing less  than if additional Middle East production was going West rather than East. 

We would be pleased to receive any insight and information from readers that could throw some light on quantities and destinations of crude oil cargoes from the Middle East, and on the tanker market in general. 

Click here to view the relevant data and graphs.  

Contact: Erik Ranheim