THE Grins are coming to the crude tanker markets.

Catogory : Announcements

THE Grins are coming to the crude tanker markets. But optimists can rightly claim that they are tamer than before, and that they may not stay long.

This is because the current down cycle, which began last year, could see its trough in the second and third quarters of this year, after which the pace of newbuilding deliveries will slow down and scrapping might pick up.

But owners will first need to face downwards pressure on freight earnings in the coming months due to oil refinery maintenance, new tonnage and the production cuts of the Organization of the Petroleum Exporting Countries, according to market participants.

Very large crude carrier, suezmax and aframax time charter equivalent earnings could dip below operating costs occasionally, some analysts said, but not for long, unless market conditions take an unexpected turn for the worse.

The predictions, should they materialise, would suggest that owners will escape from the worst: in the previous down cycle seen earlier this decade, years of earnings below operating costs pushed even big players like Frontline into restructuring mode.