VLCC and suezmax rates both improved month-on-month from January through March, the third time this pattern has occurred since 1990, said Euronav.
The rising rates in what is usually a weaker period signal the strength of the large tanker market, it said.
Hugo De Stoop, CEO of Euronav, said: “The counter seasonal strength recorded in Q1 underpins our view that strong and durable drivers are in place to continue a multi-year upcycle in large crude tanker freight markets.”
First quarter revenue of $340.0m compared to $114.4m in the same period 2022, while profit of $175.0m compared to a loss of $43.4m a year ago.
In its outlook for the tanker market, Euronav said the underlying market fundamentals had barely changed, with little newbuild contracting, supportive fleet capacity with little vessel speed change, limited shipbuilding capacity, and strong asset values.
Euronav even saw a silver lining in OPEC+ production cuts which have hit tanker rates since the end of the reporting period. With production cuts focussed in the Middle East, growing Asia markets will need to source their crude from across the Atlantic, boosting tonne-mile demand and offsetting some of the Middle East production losses, it said.
On oil demand, Euronav said: “The IEA continue to forecast a sharp acceleration of crude demand over the course of 2023 from 710k bpd in Q1 2023 to 2.6m bpd in Q4 2023. Global oil demand is expected to reach a record 102m bpd consumption during calendar 2023. The key drivers of this rebound will be recovering air traffic and the release of pent up Chinese demand as global consumption of crude is restored to levels pre-Covid-19 for the first time.”
Longer term time charters are emerging in the market, offering opportunities to extend good times when the cycle turns downwards.
Euronav said that continued quarterly improvements in rates may be difficult given the usual seasonal swings in tanker demand through the second and third quarters, notably refinery maintenance programmes, lower energy consumption during northern hemisphere spring, and inventory planning.
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