Crude tanker market to bear pain for some timeCrude tanker market to bear pain for some time

AG/East at WS33 was generating less than $5,000 a day assuming slow steaming in ballast. AG/West is negative around $14,000 a day.

 West Africa to China managed WS35, which on the basis of a round trip, slow steaming from China, gave a return of around $9,500 a day – is still below operating costs. Earnings from West Africa to US and India did manage to put on some weight managing to get to $20,000 a day and $17,500 respectively according to Clarksons Research. Average earnings for VLCCs this year over all main routes for 2013 are put at a disastrous $8,565 a day against $20,440 for the whole of last year.

Suezmaxes are faring slightly better with earnings around$10,000-13,000 a day West Africa/USG or Med and an average so far this year of around $14,000 a day.

Aframaxes have had a relatively good week with firmer rates on most routes and average earnings at around $16,000 a day are better than annual averages for the past three years.

Commentators seem agreed that the only hope for the crude tanker market, given the orderbook, is an upsurge in demand. While that doesn't seem likely in the short term, in the longer term London broker E A Gibson points to the potential of Iraq which last year broke through the 3m b/d production level for the first time since 1990 and has ambitions to ramp up production eventually to 9 or 10m b/d putting it in the top three producers. Of course none of this is going to happen in the near future so the tanker market is going to have to bear the pain for some time to come.