The biggest glut since 1996 in the supply of the largest oil tankers means owners will have to wait three more years for rates to recover, according to A.P. Moeller-Maersk A/S.
The global fleet of very large crude carriers expanded 28 percent over the last four years, Hanne Sorensen, chief executive officer of Maersk Tankers, said in response to e- mailed questions yesterday. The fleet is currently oversupplied by about 70 ships and as many as 50 more VLCCs will be delivered this year, Sorensen said.
The expansion followed a surge in shipbuilding that began in 2007 and 2008, when daily returns rose as high as $229,000, according to data from Clarkson Plc, the world’s biggest shipbroker. Daily earnings for supertankers plunged 71 percent to $8,705 in the past 12 months, Clarkson data show, amid the longest series of OPEC production cuts in four years. Frontline Ltd., the VLCC operator led by billionaire John Fredriksen, said Feb. 22 it needs daily returns of $24,200 to break even.
“We have to go back to 1996 to find a situation as challenged as the one we have today,” Sorensen said. “A recovery must be supply-driven, and that is not likely in the coming three years. The key area of demand for VLCCs is crude exports from the Persian Gulf to Asia, China, Japan, South Korea and India.”
The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, reduced production by 1.8 million barrels a day in the five months through January. Output rose to 30.7 million barrels a day last month, according to data compiled by Bloomberg.
U.S. oil output is the highest since 1993, Energy Department data show, curbing the need for imports from the Middle East. The nation bought 12 percent less crude from OPEC last year compared with 2010, and the decline is affecting the “VLCC segment negatively in the longer run,” Sorensen said.
A record 159 ships will be available to load cargoes in the Persian Gulf over the next 30 days, more than 25 percent of the global fleet, leaving the world’s biggest crude-export region “heavily” oversupplied, according to a March 4 report from Morgan Stanley. (MS:US) Each VLCC can hold 2 million barrels of oil.
The number of the tankers booked for loading in the gulf dropped to 103 in February from 123 in January, according to figures from Marex Spectron Group, a London-based commodities brokerage. That was the fewest charters since November 2010, Marex Spectron data showed.
VLCCs hauling Middle East crude to Asia, the industry’s benchmark route, are losing $2,365 a day, according to the Baltic Exchange in London. Daily losses averaged $5,072 in February, the worst return since August, according to figures compiled by Bloomberg. VLCCs earned money in only four sessions in 2012’s third quarter on the voyage.
There were 589 supertankers in the global fleet as of the start of March, according to data from IHS Fairplay, a Redhill, England-based maritime research company.
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