Tanker shipping profitability is still a way off for loss-making tankers as the pandemic drags on.New virus mutations and outbreaks have slowed the recovery in global oil demand as some countries lock down again and international travel remains complicated.This had severely impacted tanker shipping, said Peter Sand, chief shipping analyst at Bimco, during a recent online conference.“To say that the summer has not been kind to the crude oil shipping industry would be an understatement. Average earnings have dropped below $10 000 per day since June for all crude oil tankers, with many trades offering negative earnings.”Furthermore, freight rates were not high enough to cover voyage expenses, let alone operating and financing costs. The daily average of very large crude carriers (VLCC) earnings in early September stood at $8 138. Bimco estimates a standard VLCC must earn around $25 000 per day to break even.“The last time average VLCC earnings were above this level was at the end of December 2020,” said Sand.Commenting on demand for seaborne transportation of oil products, Sand said volumes had risen by 22.4% in the first six months of the year compared to the same period in 2020. “But, at 508.2m tonnes, volumes are, however, 13.4% lower than in the first half of 2019.”A saving grace for the tanker industry, said Sand, was last year’s earnings currently cushioning the bottom line.“Tanker owners are holding onto their ships, hoping for better times. New virus variants and outbreaks in regions of the world with low vaccination rates, however, continue to delay a recovery in the demand for oil. This is especially problematic as real volume growth in demand for tanker shipping over the past decade has primarily been driven by the countries that currently have low vaccination rates and which are now facing new outbreaks as a result,” he concluded.
