Not looking good for large tanker owners

Average time charter earnings on its VLCCs in the Tankers International pool were a miserable $14,000 a day, while its time chartered suezmaxes earned $21,000 a day and its spot suezmaxes $17,000 a day. Although winter will soon be coming, Euronav has been earning just $15,000 a day on its VLCCs in the fourth quarter with 41% of available days covered, while its spot suezmaxes have been earning a disastrous $8,100 a day with 36% coverage of the last quarter.

The company manages 16 suezmaxes on the spot market of which 14 are owned, nine VLCCs in the TI pool on spot, with nine suezmaxes and three VLCCs on charter.

Despite what the company describes as “strong demand for oil in the third quarter” the oversupply situation is crippling. While China passed the US in the third quarter as the world's biggest oil importer, and August seeing the highest number of oil cargoes exported out of the Arabian Gulf plus the tonne-mile impact of a lot of West African oil going east instead of to the US, none of this demand expansion could compensate for oversupply of tonnage.

And despite temporary good news on the demand side, September in fact saw OPEC output drop below 30m barrels per day (bpd) for the first time in two years. Also growing US production of shale oil took its total liquid fuels output past 10m bpd in the second quarter for the first time in decades limiting further the need for crude imports.

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